Direct Materials Usage Variance measures the efficiency of a company's use of materials in the production process by comparing the actual quantity used to the standard quantity expected to be used.
Expenditure variance measures the difference between actual spending and budgeted spending. This metric can help businesses understand financial discrepancies, control costs, and improve budgeting processes.
Fixed Overhead Expenditure Variance in standard costing refers to the difference between the fixed overhead budgeted and the actual fixed overhead incurred.
Overhead Volume Variance is a budgetary metric used in cost accounting to measure the difference between the budgeted and actual fixed overhead allocated based on the actual volume of production.
Sales Margin Quantity Variance is an important concept within standard costing that measures the difference between the budgeted sales quantity and the actual sales quantity, valued at the standard profit margin per product.
Unfavourable variance, also known as adverse variance, indicates that actual financial performance is worse than the budgeted expectation, resulting in lower profits or higher costs than anticipated.
