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What is the difference between a sales volume variance and a sales price variance?
Wiki User
∙ 7y ago
Volume is a change in how many products you sell
Price is a change in how much you charge for the product
Wiki User
∙ 7y ago
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Is the materials price variance the least significant from a standpoint of cost control?
NO - Fixed Overhead Volume Variance
Why would a favorable price variance for material might be the cause of unfavorable quantity variance?
A favorable/unfavorable price variance does not effect your quantity variance. The reason you would see a favorable price variance and an unfavorable quantity variance is because you consumed more materials than your standard allows AND the price you paid for those material was less than your standard price. If you paid more than your standard price, you would have experienced an unfavorable variance in both quantity and price.
Why then should calculate a material price variance?
Material variance should be calculated to ensure that you are setting the right price for your products. When the price varies significantly, you may need to establish a new price for the product.
Will the direct labor price variance always be unfavorable if more hours are worked than the standard hours allowed for the actual output attained?
No, Direct labor price variance is created due to difference in standard labor rate and actual labor rate for example standard labor rate per unit is 10 and actual labor rate is 11 then 1 per unit is unfavourable direct labor price variance.
What is the difference between cost and list price?
whats the difference between cost and list?
What is the difference between negative price variance and volume variance?
Negative price variance is when the cost is less than budgeted. Volume variance is a variance in the volume produce.
When computing standard cost variances the difference between actual and standard price multiplied by actual quantity yields what?
Price Variance
Is the materials price variance the least significant from a standpoint of cost control?
NO - Fixed Overhead Volume Variance
What is the reason for multiplying the sales quantity variance by the budgeted sales price even if the actual sales volume was sold at a different price?
for profit.........
Why would a favorable price variance for material might be the cause of unfavorable quantity variance?
A favorable/unfavorable price variance does not effect your quantity variance. The reason you would see a favorable price variance and an unfavorable quantity variance is because you consumed more materials than your standard allows AND the price you paid for those material was less than your standard price. If you paid more than your standard price, you would have experienced an unfavorable variance in both quantity and price.
How do you calculate material price variances and what are the possible reasons for such variances?
Following are the causes of material price variance: 1.There could have been recent changes in purchase price of materials. 2.Price variance can be due to substituting raw materials different from the original material specification. 3.Price variance can be attributed to the non availability of cash discounts which was originally anticipated at the time of setting the price standards. 4.Changes in transportation costs and storekeeping costs can also be contributing factors to material price variance.
How do you compute market price variance?
Price Variance = (Actual Price/Unit - Budgeted Price/Unit) x Actual Quantity of Output = (AP - SP) x AQ
What does shrinkage means in retail?
Shrinkage is the difference between the stock on the inventory book and the actual physical stock. Shrinkage is also deifned as the difference between the value ( retail price ) of the stock on the inventory book and the value of the ( retail price ) actual physical stock. Shrinkage % is calculated as the difference between the value ( retail price ) of the stock on the inventory book and the value of the ( retail price ) actual physical stock by the retail sales of this volume
Why then should calculate a material price variance?
Material variance should be calculated to ensure that you are setting the right price for your products. When the price varies significantly, you may need to establish a new price for the product.
What is material cost variance?
The material cost variance denoting the difference between the standard cost of materials and actual cost of matrials. The material cost variance is between the standard material cost for actual production in units and actual cost. The total cost is usually determined by two differenct factors of influence viz quantity of materials utilized/ required and price of the materials. The fluctuations in the material cost are only due to the fluctuations in the utility of materials due to many factors. Material cost variance can be computed into two different ways: DIRECT METHOD AND INDIRECT METHOD material cost variance= Standard cost of materials for actual output- actual cost of raw materials. MCV=(S Q AO X SP)-(AQ X AP) Indirect Method: material cost variance= Material price variance (MPV)+Material usage Variance
Will the direct labor price variance always be unfavorable if more hours are worked than the standard hours allowed for the actual output attained?
No, Direct labor price variance is created due to difference in standard labor rate and actual labor rate for example standard labor rate per unit is 10 and actual labor rate is 11 then 1 per unit is unfavourable direct labor price variance.
How is the sales-volume variance calculated?
sales vol. variance= standard price(actual sales vol.- std sales vol.) eg.- A= 10(35000-20000)=150000(F) B=6(25000-30000)= 30000(A) F-A= 150000-30000=120000
