222

$show=home

Welcome to Accounting Education

The Accounting University with 3400+ Accounting contents as study material which can watch, read and learn anyone, anywhere.

Start your studies

$show=home

Journal Entries $type=three$count=6$author=hide$comment=hide$label=hide$date=hide$show=home$s=0

Balance Sheet $type=three$count=6$author=hide$comment=hide$label=hide$date=hide$show=home$s=0

Types of Variance

In cost accounting, variance is very important to evaluate the performance of company for increasing its efficiency. In variance analysis, we compare actual and standard cost and revenue to know whether it is favorable or unfavorable. Favorable variance ( F ) shows that standard cost is less than actual cost or standard revenue is more than actual revenue. But unfavorable or adverse ( U or A ) variance shows that actual cost is more than standard cost or actual revenue is less than standard revenue. Types of variance are the steps to deep study of variance. We classify variance with following ways.




1st Type of Variance: Direct Material Variance

Direct material variance shows the difference between the actual cost of material of actual units and standard cost of material of standard units. It is also the total of material price variance, material quantity variance. If there is favourable material quantity variance and unfavourable material price variance or vise-versa, direct material cost may be either favourable or unfavourable because it is total of material price and material quantity variance.


2nd Type of Variance: Labor Variance

Labor variance shows the variance of labor cost. It is the difference between standard cost of labor for actual production and the actual cost of labor for actual production.




3rd Type of Variance: Overhead Variance

Overhead Variance shows the variance of all indirect cost. It is the difference between standard cost of overhead for actual output and actual cost of overhead for actual output.

4th Type of Variance: Sales Variance

Sales variance is that type of variance which shows the difference between actual sales and standard sales. But in unfavourable sales variance, our standard sale is less than actual sale. Sales variance is good way to calculate the responsibility of sales department.

Related : Standard Costing 


http://www.krantikari.org/2016/09/cost-accounting-ebook.html

Comments

: 3
  1. "Favorable variance ( F ) shows that standard cost is less than actual cost or standard revenue is more than actual revenue. But unfavorable or adverse ( U or A ) variance shows that actual cost is more than standard cost or actual revenue is less than standard revenue." -Favorable variance definition is wrong, your definition of F and U/A is the same, please proof read.

    ReplyDelete
  2. Sales Variance = Actual Sales - Standard Sales.
    For example, Actual Sales is Rs.100 And Standard Sales is Rs.110.
    So, Sales Variance = 100-110 =10(Unfavorable).
    Thus, If sales variance is Unfavorable means ACTUAL REVENUE IS MORE THAN THE STANDARD REVENUE.

    ReplyDelete
In comment, you can give your feedback, reviews, ideas for improving content or ask question relating to written content.

 


Name

access,2,account,86,accountant,95,Accounting,683,accounting definitions,99,accounting ebook,3,Accounting education,85,Accounting Education Ads Help,1,accounting procedure,2,accounting process outsourcing,2,Accounting Software,52,advance,3,advertising,6,africa,7,Amalgamation,6,amendments,16,Amortization,1,announcements,62,Annuity,2,assets,53,audit,47,auditing,41,Australia,2,B.Com.,22,balance sheet,87,bank,111,Bank reconciliation,12,banking,33,basic accounting,110,BBA,1,benefits,13,best,50,bill,12,black money,3,blog,12,bloggers,7,book keeping,4,bookkeeping,3,Branch Accounting - full tutorial,8,budget,35,Budget variance,13,business,65,businessman,9,CA,30,calculator,4,canada,3,capital,72,capital budgeting,27,career,21,cash,40,cash book,8,cash flow statement,11,Chiense,1,children,13,china,6,class,3,coaching,2,coins,2,college,6,commerce,10,commerce students,7,company,36,computer,9,computer accounting,1,conference,4,Contact vinod kumar,1,Control Your Spending,27,corporate accounting,69,cost,160,cost accounting,195,cost center,8,cost centre,1,CPA,2,credit,18,credit card,11,cs,10,currency,35,data,11,Debit and credit,17,debit cards,1,debt,62,debtor,21,degree,6,depletion,2,depreciation,38,Diwali Messages,12,documents,4,dollar,5,domain,3,Downloads,3,Dubai,1,e-accounting,17,earning,17,education,246,Education Loans,6,email,15,employee,4,EPF,2,ERP,7,euromoney,1,examination,7,excel,17,excise duty,6,expenses,65,facebook,7,factor of loan,1,fans,2,feature,32,fifo,5,FII,4,fiji,1,finacle,1,finance,823,Finance Journal Entries,6,Financial,134,financial accounting,147,Financial Statements,4,fire insurance,3,flickr,2,flow,4,forensic,4,forex,21,formula,8,france,1,fraud,6,free,2,fun,34,function,1,fund,48,GAAP,36,GDP,1,gdr,5,germany,1,gold,7,goodwill,4,goodwill accounting,3,google,34,google apps,3,google apps,1,google base,1,google buzz,1,google calendar,1,Google docs,38,google finance,3,google fusion tables,1,google talk,5,govt.,5,GST,33,guide,85,health,6,Hindi,2,Hindi Language,3,history,3,holding company,3,How to treat FBT in Tally 9,1,HRA,3,ICAI,11,ICAWI,3,ICICI Bank,1,IFRS,11,income,17,income statement,19,Income Tax,7,India,57,indian railway,1,Indonesia,1,inflation,4,inflation accounting,3,infographics,8,information,7,inspiration,176,insurance,14,insurance accounting,2,Intangible,3,interest,26,international,7,Internet,40,Introduction of Tally 9,1,inventory,41,investment,135,investment in Shares,6,invoice,3,IT,1,Japan,1,Job costing,4,journal entries,143,Journal Entries eBook Help,4,Kalculate,1,keyboard,3,kuwait,2,laptop,2,law,4,LBT,1,learning,36,lease,5,lecture,11,ledger,17,leducation,1,Leverage Analysis,7,liabilities,16,lifo,3,linkedin,1,loan,74,logical point,1,loss,5,loss of profit,1,M.Com.,5,m.phil,2,malaysia,3,management accounting,129,manual accounting,4,manufacturing account,1,market,11,marketing,3,mastercard,2,material,13,MBA,14,MCA,1,media,4,migration,2,mobile,9,money,61,ms word,3,ms. excel,14,multi currency in tally 9,1,Multicurrency Accounting,3,mutual fund,30,national security,1,new and sacrifice ratio,1,new york times,1,new zealand,1,news,1,NGO,5,nonprofit-accounting,6,North Georgia Mountains,1,Notification,1,NPV,17,NSE,1,odbc,2,office,10,oman,1,online application,2,online accounting,11,Online Accounting Course,5,otcei,1,pakistan,3,parents,3,Partnership,1,pay pal,3,pdf,4,Personal Finance,6,pie chart,1,pie chart of income,2,pnb,5,podcast,1,ppf,1,presentation,10,price,7,privacy policy,2,prof. vinod kumar,13,profit,24,profit and loss account,12,project management,11,provision,14,purchase,9,puzzles,2,quickbooks,2,Quote,22,quotes,42,quotes of svtuition,1,rating agency,2,ratio analysis,34,RBI,7,readers,13,real estate,13,rectification of errors,11,remote control,2,reports,10,reserves,8,responsibility accounting,4,retirement,2,revenue,3,Revenue reserves,2,review,7,risk,11,rupees,9,salary,5,sale,12,SAP,3,saudi arabia,1,saving,19,sbi,9,scholarship,2,school,1,SEBI,13,security,30,service tax,23,share,20,share trading,15,Shares,16,shri lanka,3,singapore,2,sms,6,social accounting,7,society,5,solution,219,South Africa,1,stock,24,stock exchange,22,structure,6,student,39,students,70,study,21,subsidiary company,2,svtuition,14,swiss bank,2,tally,100,tally 9,8,Tally 7.2,8,Tally 9,42,Tally.ERP 9,59,TallyPrime,1,tanzania,2,tax,94,Tax Accounting,30,TDS,15,teacher,62,teaching,112,technology,33,test,40,testimonial,15,testimonials,15,thailand,1,tips,60,trading,5,trading on equity,2,transaction,7,trend,12,trial balance,14,truthfulness,1,tuition,3,twitter,10,UAE,5,UGC - NET Commerce,13,UK,11,United Arab Emirates,1,university,9,usa,25,valuation,9,VAT,22,Video,36,Voucher and vouching,4,Wealth,8,wikipedia,25,working capital,29,youtube,14,
ltr
item
Accounting Education: Types of Variance
Types of Variance
https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhL0d7A1gX89FvMHl8vuDBnZYXFpFkbBDONSj5rJM_6ewWmzdbG8ZBsPNW0uVLh-OZQj3vz4XpfAice21yWClDdnzltQvifQFgI0ecuWPFg7dodTJEzHTnXBIXnPWql3kzdAQy8mJdxrd8Z/s400/variance+1.PNG
https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhL0d7A1gX89FvMHl8vuDBnZYXFpFkbBDONSj5rJM_6ewWmzdbG8ZBsPNW0uVLh-OZQj3vz4XpfAice21yWClDdnzltQvifQFgI0ecuWPFg7dodTJEzHTnXBIXnPWql3kzdAQy8mJdxrd8Z/s72-c/variance+1.PNG
Accounting Education
https://www.svtuition.org/2011/06/types-of-variance.html
https://www.svtuition.org/
https://www.svtuition.org/
https://www.svtuition.org/2011/06/types-of-variance.html
true
2410664366776677676
UTF-8
Loaded All Posts Not found any posts VIEW ALL Reply Cancel reply Delete By Home PAGES Contents View All RELATED CONTENTS FOR YOUR LEARNING Topic ARCHIVE SEARCH ALL POSTS Not found any post match with your request Back Home Sunday Monday Tuesday Wednesday Thursday Friday Saturday Sun Mon Tue Wed Thu Fri Sat January February March April May June July August September October November December Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec just now 1 minute ago $$1$$ minutes ago 1 hour ago $$1$$ hours ago Yesterday $$1$$ days ago $$1$$ weeks ago more than 5 weeks ago Followers Follow THIS PREMIUM CONTENT IS LOCKED STEP 1: Share to a social network STEP 2: Click the link on your social network Copy All Code Select All Code All codes were copied to your clipboard Can not copy the codes / texts, please press [CTRL]+[C] (or CMD+C with Mac) to copy