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Standard costing

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17 February 2014 Hello,

Can anyone explain me that in formula of Material Usage Variance i.e. (SQ-AQ)*SP why we multiply with standard price??

What is the logic behind that?? please explain in detail.



Thanks in advance

18 February 2014 Since the effect of any variation in material price from the standard is calculated in the material price variance, material usage variance is calculated using the standard price. - See more at: http://accounting-simplified.com/management/variance-analysis/material/usage.html#sthash.NI4668SK.dpuf



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