# Standard Costing and Variance Analysis

Standard costing and variance analysis is tool helps in managing accounts in cost controlling. Standard costing and variance analysis helps in production of better costs. Standard costing and variance analysis is beneficial for the company too.

Factory Overhead Volume Variance: Learning Objective of the article: Define and explain factory overhead volume variance. How is FOH volume variance calculated? Contents: Definition Formula Example Definition: Factory overhead volume variance represents the difference between the budget allowance and the standard expenses charged to

Standard Costing and Variance Analysis Formulas: Learning Objective of the article: Learn the formulas to calculate direct materials, direct labor and factory overhead variances.(Formula of Variance ) This is a collection of variance formulas / equations which can help you calculate variances for direct materials,

Variance Analysis and Management By Exception: Variance analysis and performance reports are important elements of management by exception. Simply put, management by exception means that the manager’s attention should be directed toward those parts of the organization where plans are not working out for

Managerial Usefulness/Importance of Variance Analysis: Learning Objectives: Explain the importance of variance analysis for management in decision making process. Costs of production are effected by internal factors over which management has a large degree of control. An important job of executive management is to

Factory Overhead Yield Variance: Learning Objective of the article: Define and explain overhead yield variance. Calculate overhead yield variance when three variance and two variance approaches are used. Formula of Overhead Yield Variance: (Standard hours allowed for expected output × Standard overhead rate) –

Variable Overhead Efficiency Variance: Learning Objective of the article: Define and explain variable overhead efficiency variance. How is variable overhead efficiency variance calculated? What are the reasons / causes of unfavorable variable overhead efficiency variance. When companies adopt four variance analysis approach they divide

Manufacturing Overhead Cost Standards: Learning Objective of the article: How manufacturing overhead standards are set? Procedures for establishing and using standard factory overhead rates are similar to the methods of dealing with the estimated direct and indirect factory overhead and its application to jobs

Overall or Net Factory Overhead Variance: Definition: Overall or net factory overhead variance is the difference between actually incurred factory overhead and expenses charged into process using the standard factory overhead rate. Formula of Overall or Net Factory Overhead Variance: Overall or net overhead

Materials Mix and Yield Variance: Learning Objective of the article: Define and explain materials mix and yield variances. What are the formulas of materials mix and yield variances? Calculate materials mix and yield variance. Price and quantity variances of direct materials are explained on

Mix Variance and Yield Variance: Learning Objective of the article: Define and explain Mix Variance and yield variances. Why mix and yield variances are calculated? Basically, the establishment of standard product cost requires the determination of price and quantity standards. In many industries, particularly

Direct Labor Yield Variance: Learning Objective of the article: Define and explain labor yield variances. Calculate labor yield variance. Rate and efficiency variances of labor are explained on direct labor rate variance page and direct labor efficiency variance page respectively. Here, our focus is

Factory Overhead Controllable Variance: Learning Objective of the article: Define and explain factory overhead controllable variance. How FOH controllable variance is calculated? What are the reasons / causes of unfavorable controllable variance? Contents: Definition Formula of factory overhead controllable variance Example Reasons / causes

Fixed Overhead Efficiency Variance: Learning Objective of the article: Define and explain fixed overhead efficiency variance. How is fixed overhead efficiency variance calculated? What are the reasons / causes of unfavorable fixed overhead efficiency variance? When companies adopt four variance approach they divide the

Factory Overhead Efficiency Variance: Learning Objective of the article: Define and explain factory overhead efficiency variance. How is FOH efficiency variance calculated? What are the reasons / causes of unfavorable overhead efficiency variance. Definition: Factory overhead efficiency variance is the difference between actual hours