Price Variance and Quantity Variance
1. Materials Variances
	Actual				Standard			Standard Material Cost
	P	Q	P	Q	P	Q		Price:		6
								Quantity:		40
								Actual Material Cost
	QV					PV		Price:		7
								Quantity:		35
			Total Variance
Material price variance = (standard price - actual price ) actual quantity = ($6 -$7) 35 = $35 unfavourable Material qty. Variance = (standard quantity- actual quantity ) standard rate = (40 - 35 ) 6 = $30 favourable Total variance or net variance = $30 - $35 = $5 unfavorable
2. Labor Variances
	Actual				Standard
	P	Q	P	Q	P	Q		Standard Labor Cost
								Price:		20
								Quantity:		5
	QV					PV		Actual Material Cost
								Price:		22
			Total Variance					Quantity:		4