Standard costing and variance analysis: materials price/usage, labour rate/efficiency

What this note covers

1. What standard costing is and why businesses use it
2. Materials price and usage variances
3. Labour rate and efficiency variances
4. Favourable, unfavourable and responsibility
5. Full worked example: four variances for one production run
6. Common pitfalls in the calculation
7. How this topic is examined

7 sections · 12 key terms & formulas · 6 common mistakes