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Variance analysis

This topic has 1 reply, 2 voices, and was last updated 9 years ago by John Moffat.

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August 21, 2015 at 1:28 pm #267972
Xairie
Member
- Topics: 41
- Replies: 42
Dear sir,
Why are we always multiplying the variance with std.cost when computing material usage, laboure and variable OH efficiency variance??
Thankyou
August 21, 2015 at 6:53 pm #267998
John Moffat
Keymaster
- Topics: 57
- Replies: 54723
You really need to watch the free lectures to see the reason – I cannot type out the whole lecture here.
We are trying to calculate separately the difference due to changes in price and rate from the differences due to using more or less than budgeted.
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