notes

1. Standard Costing
Standard Quantity for Actual Output =
Standard Input
Standard Output
X Actual Output
Standard Mixture of Material A =
Standard Input Of A
Standard Output of All Materials
Standard Mix of Labour of Skilled =
Standard Hours of Skilled
Standard Hours of All (Skilled+Semi−Skilled)
Material Variances
Material Cost Variance (Total Variance)
Standard Cost for Standard Quantity - Actual Cost for Actual Quantity
(SQ X SP) - (AQ X AP)
Standard Cost - Actual Cost
Favourable = If, Actual Cost < Standard Cost
Adverse = If, Actual Cost > Standard Cost
Material Usage Variance
(Standard Quantity - Actual Quantity) x Standard Price
(SQ - AQ) x SP
(SQ X SP) - (AQ X SP)
Standard Cost for Standard Quantity - Standard Cost for Actual Quantity
Favourable = If, Actual Quantity < Standard Quantity
Adverse = If, Actual Quantity > Standard Quantity
Material Price Variance
(Standard Price - Actual Price) X Actual Quantity
(SP - AP) X AQ
(SP X AQ) - (AP X AQ)
Standard Cost for Actual Quantity - Actual Cost for Actual Quantity
Favourable = If, Actual Price < Standard Price
Adverse = If, Actual Price > Standard Price

2. Material Mixture Variance
RQ of A =
Total Quantity of Actual Mix
Total Quantity of Standard Mix
X Standard Quantity of A
Material Mixture Variance =
(Revised Quantity - Actual Quantity) x Standard Price
(RQ - AQ) x SP
(SP X RQ) - (SP X AQ)
Standard Cost for Revised Quantity - Standard Cost for Actual Quantity
Favourable = If, Actual Mix < Standard Mix
Adverse = If, Actual Mix > Standard Mix
Material Yield Variance
(Standard Quantity - Revised Quantity) X Standard Price
(SQ - RQ) X SP
(SP X SQ) - (SP X RQ)
Standard Cost for Standard Quantity - Standard Cost for Revised Quantity
Favourable = If, Revised Quantity < Standard Quantity
Adverse = If, Revised Quantity > Standard Quantity
Verification:
Material Cost Variance = Material Usage Variance + Material Price Variance
(SQ X SP) - (AQ X SP) = [(SQ X SP) - (AQ X SP)] + [(SP X AQ) - (AP X AQ)]
Material Usage Variance = Material Yield Variance + Material Mix Variance
(SQ X SP) - (AQ X SP) = [(SP X SQ) - (SP X RQ)] + [(SP X RQ) - (SP X AQ)]
Labour Variances
Labour Cost Variance
Standard Cost for Standard Hours - Actual Cost for Actual Hours
(SH X SR) - (AH X AR)
Standard Cost - Actual Cost
Favourable = If, Actual Cost < Standard Cost
Adverse = If, Actual Cost > Standard Cost

3. Labour Efficiency (Time) Variance
(Standard Hours - Actual Hours) x Standard Rate
(SH - AH) X SR
(SR X SH) - (SR X AH)
Standard Cost for Standard Hours - Standard Cost for Actual Hours
Favourable = If, Actual Hours < Standard Hours
Adverse = If, Actual Hours > Standard Hours
Labour Rate Variance
(Standard Rate - Actual Rate) X Actual Hours
(SR - AR) X AH
(AH X SR) - (AH X AR)
Standard Cost for Actual Hours - Actual Cost for Actual Hours
Favourable = If, Actual Rate < Standard Rate
Adverse = If, Actual Rate > Standard Rate
Labour Mixture Variance
RQ of A =
Total Hours of Actual Mix
Total Hours of Standard Mix
X Standard Hours of A
Labour Mixture Variance = (RH - AH) X SR
Standard Cost for Revised Hours - Standard Cost for Actual Hours
Favourable = If, Actual Mix < Standard Mix
Adverse = If, Actual Mix > Standard Mix
Labour Yield Variance
(SH - RH) X SR
(SR X SH) - (SR X RH)
Standard Cost for Standard Hours - Standard Cost for Revised Hours
Favourable = If, Revised Hours < Standard Hours
Adverse = If, Revised Hours > Standard Hours
Verification:
Labour Cost Variance = Labour Efficiency Variance + Labour Rate Variance
Labour Efficiency Variance = Labour Yield Variance + Labour Mix Variance