Standard data

selling price per unit is Rs 200

Material per unit is 5kg @ Rs 10 per kg
Labour per unit is 4 hours @ Rs 5 per hour
Variable overheads is Rs 2 per labour hoiur
Fixed overheads Rs 1.25 / labour hour 5
Standard profit = 200 - 50 - 20 - 8 - 5 = 117
Budgeted units = 200
Fixed production overheads budgeted = 1000

Fixed Budget
200 units
Sales revenue 40000
Costs
Material -10000
labour -4000
variable overheads -1600
Fixed overheads -1000

Profit 23400 117

1. Material variance
Material price variance = AQAU(SR-AR)
Material usage variance = SR (SQAU-AQAU)

2. Labour variance
Labour rate variance = AHAU (SR-AR)
Labour efficiency variance = SR (SHAU-AHAU)

3. Variable overheads variance

Variable overheads expenditure var. = AHAU(SR-AR)
Variable overheads efficiency var. = SR (SHAU-AHAU)

4.Fixed overhead variances

Fixed overheads expenditure variance = Budgeted - Actual
Fixed overheads volume variance = oar per unit (AU-BU)
Fixed overheads volume capacity variance = oar per hour(AH
Fixed overheads volume efficiency var = oar per hour (SHAU-
5.Sales price variance
Sales price variance = AU(Actual SP - Standard SP)
6. Sales Volume variance
Sales Volume Profit variance = Std profit (AU-SU)
Budgeted profit
Sales Volume Profit Variance
Standard profit from actual sales

Variances
Sales Price variance
Material Price
Material usage
Labour efficiency
Labour rate
Variable overheads expenditure
Variable overheads efficiency
Fixed overheads expenditure
Fixed overheads volume capacity
Fixed overheads volume efficiency

Actual profit
 Actual data
selling price per unit is Rs 250
Material per unit is 4kg @ Rs 12 per kg
Labour per unit is 5 hours @ Rs 3 per hour
Variable overheads is Rs 4 per labour hoiur
Fixed overheads Rs 1200
Actual units = 250

Flexed Budget Actual Results Variances

250 units 250 units
50000 62500 12500

-12500 -12000 500

-5000 -3750 1250
-2000 -5000 -3000
-1250 -1200

29250 5850 40550

500 F Difference between flexed and actual material cost

-2000 A
2500 F
500 F
1250 F Difference between flexed and actual labour cost
2500 F
SHAU-AHAU) -1250 A
1250 F
-3000 A Difference between flexed and actual variable overheads
var. = AHAU(SR-AR) -2500 A
. = SR (SHAU-AHAU) -500 A
-3000
50
iance = Budgeted - Actual -200
e = oar per unit (AU-BU) 250
variance = oar per hour(AHRS-BHRS) 562.5 If you add both variances capacity and efficiency you will
cy var = oar per hour (SHAU-AHAU) -312.5
12500 F Difference between flexed and actual revenue
SP - Standard SP) 12500 F
F
d profit (AU-SU) 5850
 23400
5850 F
29250

12500
-2000
2500
-1250
2500
-2500
-500
-200
562.5
-312.5 11300

40550 40550 0
 F

F
F
A

tual material cost

tual labour cost

tual variable overheads cost

y and efficiency you will get volume variance total

tual revenue