ACCT 21O2- Variances

🟢 DM Price Variance

How many you bought × (What you paid − What you were supposed to pay)

🟢 DM Quantity (Efficiency) Variance

What it SHOULD cost × (What you used − What you were allowed to use)

✅ Total Direct Materials Variance

Total DM Variance = DM Price Variance + DM Quantity Variance

🟢 DL Rate Variance

DL Rate Variance = Hours Worked × (Actual Pay Rate − Standard Pay Rate)

🟢 DL Efficiency Variance

DL Efficiency Variance = Standard Rate × (Actual Hours − Standard Hours Allowed)