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Standard costing variances, two-way overhead variances

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Question:
REQUIRED:
A. Materials price variance for each item.
Materials price variance = (Act Rate - Std rate) * Actual Qty
Materials price variance = (Act Rate - Std rate) * Actual Qty
B. Materials quantity variance for each item.
C. Labor rate variance.
D. Labor efficiency variance.
E. Budget variance.
F. Volume variance.

Please find Attachment for complete question.

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Solution Summary

Your tutorial is attached in excel and provides a "grid" that helps you to isolate these variances. The overhead variance is the "two-way" variance method. This is now a template to use for other similar standard costing variance problems.

Solution provided by:
Carol Sargent, PhD
Education
  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
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