Variance Analysis - Help

[gemmacooling]

Hello,<BR>I have my intermediate exams in June and im still having problems remembering which details to use in each different type of variance Eg, usage variance, volume varince ect.<BR><BR>Any ideas on how I can remember these? <BR><BR>Gemma

[LisaR]

Hi Gemma,<BR><BR>I'm also studying @ Intermediate level. I use this following method to remember the variance<BR><BR>U X SU X SC (Units X Standard Usage X Standard Cost)<BR> AU X SC (Actual Usage X Standard Cost)<BR>UX SU-AU X SC (Units X Standard Usage - Actual Usage X Standard Cost)<BR><BR>U X SH X SR (Units X Standard Hour X Standard Rate)<BR> AH X SR (Actual Hour X Standard Rate)<BR>U X SH - AH X SR (Units X Standard Hour - Actual Hour X Standard Rate)<BR><BR>When I'm doing variance analysis, I just jot the short hand formulas down and remember it easily. <BR><BR>I hope this helps. <BR><BR>GOOD LUCK in June.

[AATBabe]

Material Price Variance: (AQ X AP) - (AQ X SP): (Actual Qty x Actual Price)-(Actual Qty X Std Price)<BR><BR>Material Usage Variance: (AQ X SP) - (SP X SQ): (Actual Qty X Std Price)-(Std Price X Std Qty)<BR><BR>Labour Rate Variance: (AH X AR) - (AH X SR): (Actual Hr X Actual Rate)-(Actual Hr X Std Rate)<BR><BR>Labour Efficiency Variance: (AH X SR) - (SR X SH): (Actual Hr X Std Rate)-(Std Rate X Std Hr)<BR><BR><BR>As you see in the material price variance you carry the AQ X SP to the usage variance.<BR>Also when you do your labour variances just change the Q (Qty) to H (Hrs) and P (Price) to R (Rate). Also in the labour rate variance you carry the AH X SR to the efficiency variance.<BR><BR>Its a bit mind boggling but I bet a couple of days before the exam you will remember so easily you will always remember them!!!!!!<BR>