Direct material mix variance is one of the germane variances to compute for a company using more than one type of direct material in its manufacturing process. What this means is that the production of a single product requires the use of more than one direct material. In this article, I will walk …
The primary purpose why businesses exist is to generate profit. How this profit is earned is primarily through sales of the business’s offering. It is, therefore, essential for every organization to carry out a variance test of its sales price. In this article, we’ll consider everything you need to know about sales price variance. …
Variance analysis is a concept that gives some students the jitters. The reason isn’t far-fetched. Variance analysis has just too many concepts, terms, and calculations you have to wrap your head around. In this article, you’ll learn about sales mix variances. Importantly, I will guide you through calculations of this mix variance. Please, …
Check this fact: Fixed overhead variance is an extension of fixed overheads. Did you nod in the affirmative? Well, let’s proceed. Fixed overhead cost refers to costs that are incurred even when the production level is zero. It includes insurance, rent, utility, office administrative expenses, and other expenses of the same …
Sales is the most important source of revenue for any company. It is, therefore, germane for every business to carry out variance tests on its sales. There are different variance analyses that a business can conduct on its sales effort. Examples include sales quantity variance, sales margin price variance, and so on. In this post, …
Fixed overhead volume variance is a fundamental variance that must be tested for each time a company is carrying out variance analysis to determine the effectiveness of its operational management. Fixed overhead volume variance like fixed overhead expenditure variance is a component variance of fixed overhead variance (FOH). Examples of fixed overhead costs are …
The variance analysis formula is an important concept in cost accounting that’s used to measures the difference between the standard level of performance and the actual level of performance achieved by an entity. Variance analysis helps the management of any business to assess its performance against set standards. You can apply variance analysis to different …
Sales volume variance is a concept you should be concerned about since sales are the most important means by which any business generates money. Without sales, it is impossible for businesses to remain in business. If you are a student of accounting, a business owner, an accountant, or even a salesperson, you must understand that …
You are on the page where direct labor efficiency variance (DLEV) is broken down in the simplest of terms. This means: You’ll find it easy to understand this post. Now, off we go: Direct labor efficiency is one of the three aspects of labor cost variance which are: direct labor rate variance, idle time …
Direct labor rate variance is one of the three basic analyses of labor cost variance. The other two are direct labor efficiency variance and idle time variance. Direct labor rate variance is a key aspect of standard costing which helps to study the discrepancy between standard results and actual results. What Is Direct Labor …
