Page 228 - Microsoft Word - 00 Prelims.docx
P. 228
Chapter 10
Materials variances
Total materials variance
Materials price variance Materials usage variance
Did each unit of material Did actual production use
cost more or less than more or less units of
expected? material than expected?
Actual quantity bought × actual price (AQ AP)
Price variance
Actual quantity bought × standard price (AQ SP)
Actual quantity used × standard margin (AQ SP)
Usage variance
Standard quantity used × standard price (SQ SP)
for actual production
Illustrations and further practice
Now try TYU 2 ‘Materials variances’.
222
