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Variance Formula

The document outlines various formulas for calculating planning and operational variances related to materials and sales. It includes calculations for material price and usage variances, as well as sales margin and contribution variances. Each variance is defined with specific formulas to assess performance against budgeted expectations.

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璇詠
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14 views3 pages

Variance Formula

The document outlines various formulas for calculating planning and operational variances related to materials and sales. It includes calculations for material price and usage variances, as well as sales margin and contribution variances. Each variance is defined with specific formulas to assess performance against budgeted expectations.

Uploaded by

璇詠
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

PLANNING AND OPERATIONAL VARIANCE

Material price planning variance

= (Original budget price – Revised budget price) x Revised Budget Qty per unit of output x
Actual output

Material usage planning variance

= (Original budget quantity – Revised budget quantity) x actual output x original budget price

Material pricing operational variance

= (Standard price (SP) – Actual price (AP)) x Actual Quantity (AQ)

Material usage operational variance

= (Standard Quantity (SQ) – Actual Quantity (AQ)) x Standard price (SP)

MIX & YEILD VARIANCE


Material Mix Variance

= (Total Quantity in Standard Proportion (Standard quantity / Total standard quantity x Total
actual Quantity) – Actual Quantity) x Standard price

Standard cost of yield

= (Total standard amount x Total standard quantity)

Material Yield Variance

= (Actual Yield – Standard Yield) x Standard Cost of the Yield


SALE VARIANCE
Sales Margin Variance
= (Actual Quantity x Actual Profit Margin) – (Budgeted Quantity x Budgeted Profit Margin)
Actual Profit Margin: Actual Sales Price – Standard Cost
Budgeted Profit Margin: Budgeted Sales Price – Standard Cost

Sales Margin Price Variance


= (Actual Sales Price – Budgeted Sales Price) x Actual Quantity

Sales Margin Volume Variance


= (Actual Quantity – Budgeted Quantity) x Budgeted Profit Margin

Sales Margin Mix Variance


= (Actual Mix – Standard Mix) x Budgeted Profit Margin
Actual Mix: Actual Quantity
Standard Mix: Z / total x actual quantity

Sales Margin Quantity Variance


= (Actual Quantity in Standard Mix – Budgeted Quantity) x Budgeted Profit Margin
Actual Quantity in Standard Mix: Z / total x actual quantity

Sales Contribution Variance

= (Actual Quantity x Actual Contribution per unit) – (Budgeted Quantity x Budgeted


Contribution per unit)

Actual Contribution per unit = Actual selling price – Variable cost (standard cost –
fixed cost)

Budgeted Contribution per unit = Budgeted selling price – Variable cost (standard cost
– fixed cost)
Sales Contribution Price Variance

= (Actual Selling Price – Budgeted Selling Price) x Actual Quantity

Sales Contribution Volume Variance

= (Actual Quantity – Budgeted Quantity) x Budgeted Contribution per Unit

Sales Contribution Mix Variance

= (Actual Mix – Budgeted Mix) x Budgeted Contribution per Unit

Sales Contribution Quantity Variance

= (Actual quantity in Budgeted Mix – Budgeted Quantity) x Budgeted Contribution per Unit

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