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Variance Analysis

Variance Analysis - standard — as a basis for calculating...

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Variance Analysis In order to understand the $1,175 unfavorable monthly variance, it must be analyzed by its  component parts: direct materials variances, direct labor variances, and overhead variances. Each of  these variances can further be broken down into a price (rate) variance and a quantity (usage or  efficiency) variance. A general template that can be used for direct materials variances, direct labor  variances, and variable overhead variances uses three amounts — actual, flexible budget, and 
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Unformatted text preview: standard — as a basis for calculating the variances. The price variance is favorable if actual costs are less than flexible budget costs. The quantity variance is favorable if flexible budget costs are less than standard costs. The total variance is favorable if the actual costs are less than standard costs....
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