# Calculating Material Variances - Other methods

# Formulae with Numerical Codes for Values

If too many modes would distort your understanding, it is better advised to avoid reading this. The only reason it is being given is to make you aware of all the possibilities in the learning process.

1 | SQ ×
| SC(AO) | Standard Cost for Actual Output | ||

2 | AQ × AP | AC | Actual Cost of Materials | ||

3 | AQ × SP | SC(AQ) | Standard Cost of Actual Quantity | ||

4 | SQ ×
| SC(AI) | Standard Cost for Actual Input |

MCV MPV MQV/MUV MMV MYV/MSUV | = = = = = | 1 − 23 − 2 1 − 3 4 − 3 1 − 4 | Material Cost Variance Material Price Variance Material Quantity/Usage Variance Material Mix Variance Material Yield/Sub-Usage Variance |

## The pit fall

We have to remember the variances based on the order number attributed to the calculated values.The value calculations are the same as the values in the working table we prepare. Thus it would be fool proof if we are able to remember the relations in the formula as abbreviations representing values rather than the number assigned for values.

MCV MPV MQV/MUV MMV MYV/MSUV | = = = = = | 1 − 23 − 2 1 − 3 4 − 3 1 − 4 | ~ SC(AO) − AC ~ SC(AQ) − AC ~ SC(AO) − SC(AQ) ~ SC(AI) − SC(AQ) ~ SC(AO) − SC(AI) |

If we are to find out the variances for individual materials, then multiple calculations of this sort have to be made once for each material. The working table format would be more convenient to derive all the information needed.

If we understand the logic behind the formulae, we don't even need to mug up the formulae. We can recollect or derive them on the fly. Try working out all the problems with the same set of formulae.