Accounting › Section U · Standard costs and variances › Topic U.2
Materials variances
When materials cost more or less than standard, managers need to know whether the company paid a different price or used a different amount. Splitting the total materials variance answers exactly that question.
In this topic
- Two reasons materials cost can differ
- The materials price variance
- The materials quantity variance
- Three columns that tie together
- Worked example: Pellworth's March clay
- When purchases and usage differ
- Worked example: Pellworth's April clay
- Why price variances arise
- Why quantity variances arise
- Common mistakes to avoid
- Key takeaways
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