Page 36 - Cost Accounting - Ready Reckoner

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1. Material Cost Variance (MCV)

Material Cost Variance
(MCV)
1-2

SPSQ - APAQ

Material Price Variance Material Usage Variance
(MUV) (MUV)
3 - 2 1 - 3

(SP - AP)AQ (SQ - AQ)SP

Material Mix Variance Material Yield Variance
(MMV) (MYV)
4 - 3 1 - 4
(RSQ - AQ)SP (SQ - RSQ)SP

SQ = Standard Quantity for Actual Production
AQ = Actual Quantity

SP = Standard Price

RSQ = Revised Standard Quantity (Actual Quantity in Standard mix)
AP = Actual Price

RSQ arises when there is more than one material used for production

1 2 3 4
SPSQ APAQ AQSP RSQSP

MCV = MPV + MUV
MUV = MMV + MYV