Materials Variance Formulas Total, Price, and Quantity

AQ = Actual Quantity AP = Actual Price SQ = Standard Quantity SP = Standard Price F = Favorable is when the actual is lower than the standard. U = Unfavorable is when the actual is higher than the standard. Standard Quantity (SQ) Formula Actual Units Produced X Units of material required per unit Step 1 (7,250 X 4) Step 2 = 29,000 Note: Actual Quantity, Actual Price, and Standard Price will all be given to you in the problem. Total Materials Variance Formula (AQ X AP) - (SQ X SP) (30,000 X $5.05) - (29,000 X $5.50) $151,500 - $159,500 = $8,000 F Materials Price Variance Formula (AQ X AP) - (AQ X SP) (30,000 X $5.05) - (30,000 X $5.50) $151,500 - $165,000 = $13,500 F Materials Quantity Variance Formula (AQ X SP) - (SQ X SP) (30,000 X $5.50) - (29,000 X $5.50) $165,000 - $159,500 = $5,500 U

Step 1 Step 2 Step 3

Step 1 Step 2 Step 3

Step 1 Step 2 Step 3

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Materials Variance Formulas Total, Price, and Quantity

How to Determine Amounts for Variance Formulas Exercise Example: The standard cost of Product- A manufactured by Morrison Pet Supply Company includes four units of direct material at $5.50 per unit. During August, 30,000 units of direct materials are purchased at a cost of $5.05 per unit. And 30,000 units of direct materials are used to produce 7,250 units of Product -A. AQ = 30,000 units of direct materials used to produce 7,250 units of Product-A AP = $5.05 Actual price paid per unit of direct materials SQ = (7,250 units of Product-A produced X 4 units Estimated direct material to produce one unit of Product-A) which equals 29,000 total units of direct material. SP = $5.50 Estimated price to be paid per unit of direct material.

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