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Pooja, Lovely Professional University Unit 11: Variance Analysis

Unit 11: Variance Analysis Notes

CONTENTS
Objectives
Introduction

11.1 Classification of Variances
11.2 Material Variances
11.2.1 Material Cost Variance (MCV)

11.2.2 Material Price Variance
11.2.3 Material Usage or Quantity Variance
11.2.4 Material Sub-usage Variance
11.2.5 Material Yield Variance
11.3 Labour Variance

11.3.1 Labour Cost Variance
11.3.2 Labour Rate or Wage Pay Variance
11.3.3 Labour Efficiency Variance

11.3.4 Idle Time Variance
11.3.5 Labour Mix Variance
11.3.6 Labour Sub-efficiency Variance
11.3.7 Labour Yield Variance
11.4 Overhead Variances

11.5 Sales Variance
11.5.1 Sales Values Variance
11.5.2 Sales Price Variance

11.5.3 Sales Volume Variance
11.6 Summary
11.7 Keywords
11.8 Self Assessment
11.9 Review Questions

11.10 Further Readings

Objectives

After studying this unit, you will be able to:
Compute cost variance like material cost, labour cost and one hour cost

Determine revenue variance like sales variance

LOVELY PROFESSIONAL UNIVERSITY 221