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Advanced variances

Method 1: The ‘total’ method

Actual yield (output) X units

Expected outputs from actual input Y units
––––––––

Difference X – Y units
@ standard material cost per unit of output $
––––––––

Variance (X – Y) × $

––––––––

Method 2: The ‘individual’ method

Material Actual Quantity, Standard Difference @ Standard Variance
Standard Mix Quantity, price
(AQSM) Standard Mix
(SQSM)
M1 A kgs D kgs D – A $x/kg $Var
(F/A)
M2 B kgs E kgs E – B $x/kg $Var
(F/A)
M3 C kgs F kgs F – C $x/kg $Var
(F/A)

$Total
yield
(F/A)

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