Financial Performance Variance Formulas

mrderek88
mrderek88 Feels At HomeElgin, ScotlandRegistered Posts: 44
Hi guys


Got my exam on 5th December so the revision is now in full swing.

Some of the formulas Im still not 100% happy and before I put my head down and memorise the hell out of them, I need to make sure they are correct!

Here is what I believe them to be (going by previous Osborne books questions!)




DIRECT MATERIAL PRICE: (actual units x std. material cost) – actual cost

DIRECT MATERIAL USAGE: [(std. unit x product hours) – actual units] x std. material cost




DIRECT LABOUR RATE: (actual hours x std. labour rate) – actual cost

DIRECT LABOUR EFFICIENCY: [(hours per unit x product hours) – actual hours] x std. labour rate




FIXED O’HEAD EXPENDICTURE: standard fixed overheads – actual overheads

FIXED O’HEAD CAPACITY: (actual hours x std. o’head rate) - (std. hours x std. o’head rate)

FIXED O’HEAD EFFICIENCY: (actual prod. hours x std. o’head rate) - (actual hours x std. o’head rate)





Any help/guidance/additions would be great.

Thanks

Derek
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