INCOME TAX NOTES

Standard Costing formula table, trick, for IPCC, easy



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