Manufacturing Cost & Production Variance
Compare standard manufacturing costs with actual costs for the quantity produced. Analyse material price and usage variances, labour rate and efficiency variances, overhead variance, and the overall cost difference.
1. Production Details
2. Material Costs
3. Labour Costs
4. Overhead Costs
Calculate Manufacturing Variance
Reset
Manufacturing Cost Results
Variance Interpretation
Variance convention: A positive variance is unfavourable because actual cost exceeds standard cost. A negative variance is favourable because actual cost is below standard cost. This convention applies to the individual variances and the overall cost variance.
Formulas: Standard material cost = standard quantity allowed for actual output × standard price. Material price variance = actual quantity × (actual price − standard price). Material usage variance = standard price × (actual quantity − standard quantity allowed). Labour rate variance = actual hours × (actual rate − standard rate). Labour efficiency variance = standard rate × (actual hours − standard hours allowed). Overhead variance = actual overhead − standard overhead allowed. Overall variance = actual total cost − standard total cost.
Assumptions: Standard quantities and hours are applied to actual output. Overhead is assumed to be allocated based on labour hours. The overhead variance shown is the difference between actual overhead and standard overhead allowed; it does not separately split fixed and variable overhead variances.
Example Reference
The following example is for reference only. These figures are not entered automatically into the calculator.
Example inputs: Standard material quantity 2 per unit at ₹50; actual material quantity 2,100 at ₹52. Standard labour 0.5 hours per unit at ₹200; actual labour 550 hours at ₹210. Standard overhead rate ₹100 per labour hour; actual overhead ₹58,000.