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Cost and Management Accounting: Topic:-Types of Material Variances
Cost and Management Accounting: Topic:-Types of Material Variances
ACCOUNTING
TOPIC:-
TYPES OF MATERIAL VARIANCES
MATERIAL COST VARIANCES
AC =(AQ × AP)
SQ = standard quantity for actual output
SP = standard price
AQ = actual quantity
AP = actual price
MATERIAL PRICE VARIANCE
inefficient purchasing
rush purchases
MATERIAL USAGE VARIANCE
MUV = (SQ-AQ) × SP
REASONS :-
poor workmanship
AY = actual yield
SY = standard yield