The following are actual cost and variances for direct materials and direct labour for the month of March 2002: Actual Variances Cost Unfavorable Favorable Rs. Rs. Rs. Direct Material 450,000 Price variance 35,000 Quantity Variance 25,000 Direct Labour 800,000 Rate variance Efficiency variance 22.500 52,500
The following are actual cost and variances for direct materials and direct labour for the month of March 2002: Actual Variances Cost Unfavorable Favorable Rs. Rs. Rs. Direct Material 450,000 Price variance 35,000 Quantity Variance 25,000 Direct Labour 800,000 Rate variance Efficiency variance 22.500 52,500
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter6: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 2E: Identify cost graphs The following cost graphs illustrate various types of cost behavior: For each...
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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