Planning and Operational Variances

Planning and Operational Variances

1. Materials Price

   • Planning Variance
     • Should Cost for actual qty of materials
       • MINUS
         • Revised Should cost for actual qty of materials
   • Operational Variance
     • Revised Should cost for actual qty of materials
       • MINUS
         • Actual Cost

2. Labour Rate

   • Planning Variance
     • Should Cost for actual labour hours
       • MINUS
         • Revised Should Cost for actual labour hours
   • Operational Variance
     • Revised Should Cost for actual labour hour
       • MINUS
         • Actual cost

3. Materials Usage

   • Planning Variance
     • Should Usage for actual units
       • MINUS
         • Revised Should Usage for actual units
           • x St Price
   • Operational Variance
     • Revised Should Usage for actual units
       • MINUS
         • Actual Usage
           • x St Price

4. Labour Efficiency

   • Planning Variance
     • Should hours for actual units
       • MINUS
         • Revised Should hours for actual units
           • x St Rate
   • Operational Variance
     • Revised Should hours for actual units
       • MINUS
         • Actual hours
           • x St Rate