Standard costing formula remember trick
Easy to remember chart:
1. Direct Material
Variances (Standard Cost - Actual Cost)
|
(SQ * SP - AQ * AP)
|
a. Direct Material Price Variances (in simple change in
price According to Actual Usage)
|
AQ (SP - AP)
|
a. Direct Material Quantity Variances (in simple change in
price According to Actual Usage)
|
SP (SQ - AQ)
|
b1. Direct Material mix Variances
|
SP (RSQ - AQ)
|
b2. Direct Material yield or revised usage
Variances
|
SP (SQ - RSQ)
|
2. Direct Labour Variances (Standard Cost
- Actual Cost)
|
(SH
* SR - AH * AR)
|
a.
Direct Labour Price Variances (in simple change in price According to
Actual Usage)
|
AH (SR - AR)
|
a.
Direct Labour Hour Variances (in simple change in price According to
Actual Usage)
|
SR (SH - AH)
|
b1. Direct Labour mix Variances
|
SR (RSH - AH)
|
b2. Direct Labour yield or revised usage Variances
|
SR (SH - RSH)
|
Sales value
Variances (Standard Cost - Actual Cost)
|
(SQ * SP - AQ * AP)
|
a. Sales value Price Variances (in simple change in price
According to Actual Usage)
|
AQ (SP - AP)
|
b. Sales value Volume Variances (in simple change in price
According to Actual Usage)
|
SP (SQ - AQ)
|
b1. Sales value mix Variances
|
SP (RSQ - AQ)
|
b2. Sales Value Quantity Variances
|
SP (SQ - RSQ)
|
Fixed Overhead Cost Variances (Standard Cost
- Actual Cost)
|
(SQ * SP - AQ * AP)
|
a. Fixed overhead Budget / Cost Variances (in simple change
in price According to Actual Usage)
|
Budgeted
Overheads - Actual Overheads
|
b. Fixed overhead Volume Variances (in simple change in
price According to Actual Usage)
|
= Std. Fixed O/h
Absorption Rate/ Hr./unit ( Actual Hrs. Worked Unit – Budgeted
hour unit)
or
=
Fixed O/hs Absorbed - Budgeted Fixed O/hs
|
b1. Fixed overhead mix / Efficiency
Variances
|
Variable overhead efficiency variance = Budget
allowance based on actual hours worked - Budget allowance based on standard
hours allowed
|
b2. Fixed overhead Volume / Capacity Variances
|
Std. Fixed O/h
Absorption Rate/ Hr. (Actual Hrs. Capacity - Budgeted
Hrs. Capacity)
|
B2a.
Fixed Overhead Calendar Variance
|
B2b. Fixed Overhead Revised Capacity Variance
|
Variable Overhead Cost Variance
|
Variable O/H for actual output according to standard variable per unit
cost – Actual variable output
(SVO/h for AO – AV O/h)
O = Output
V = Variable
|
a. Variable Overheads Budget Variance
|
(SV O/h Rate – AH) * AV O/h
|
b. Variable Overhead Efficiency Variance
|
(SH for AO –
AH) * SR
|