CV

SET B · Core

Standard Costing — Variance Analysis

Material/Labour variances split into Price (rate) × Quantity (efficiency × yield/mix).

Formula / Rule

Material Usage Var = (Std qty − Actual qty) × Std price; Yield Var = (Std qty for actual output − Actual qty at std mix) × Std price

Memory aid

Price first, quantity second. Yield + Mix = total Usage.

⚠ Most common mistake

Multiplying by the wrong reference (using actual price in usage variance, etc.).

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