Standard Costing Formulas Cheat Sheet
All variance analysis formulas for CA Inter Cost Accounting in one place. Bookmark this page for quick revision before your May 2026 exam.
CA Inter Paper 3 May 2026
Key Abbreviations
SQ = Standard Quantity (for actual output)
AQ = Actual Quantity
SP = Standard Price
AP = Actual Price
SH = Standard Hours (for actual output)
AH = Actual Hours
SR = Standard Rate
AR = Actual Rate
RSQ = Revised Standard Quantity
RSH = Revised Standard Hours
VOH = Variable Overhead
FOH = Fixed Overhead
Material Variances
| Variance | Formula |
|---|---|
| Material Cost Variance (MCV) | (SQ × SP) - (AQ × AP) Standard Cost - Actual Cost |
| Material Price Variance (MPV) | AQ × (SP - AP) Actual Qty × (Std Price - Actual Price) |
| Material Usage Variance (MUV) | SP × (SQ - AQ) Std Price × (Std Qty - Actual Qty) |
| Material Mix Variance (MMV) | SP × (RSQ - AQ) Std Price × (Revised Std Qty - Actual Qty) |
| Material Yield Variance (MYV) | SP × (SQ - RSQ) Std Price × (Std Qty - Revised Std Qty) |
Relationship: MCV = MPV + MUV = MPV + MMV + MYV
Worked Example: Material Variances
Standard
10 kg @ ₹50/kg per unit
Output: 100 units
SQ = 1,000 kg, SP = ₹50
Actual
1,050 kg purchased & used
@ ₹48/kg
AQ = 1,050 kg, AP = ₹48
MPV = AQ × (SP - AP) = 1,050 × (50 - 48) = ₹2,100 (F)
MUV = SP × (SQ - AQ) = 50 × (1,000 - 1,050) = ₹2,500 (A)
MCV = MPV + MUV = 2,100 (F) + 2,500 (A) = ₹400 (A)
Verify: MCV = (SQ × SP) - (AQ × AP) = (1,000 × 50) - (1,050 × 48) = 50,000 - 50,400 = ₹400 (A) ✓
Labour Variances
| Variance | Formula |
|---|---|
| Labour Cost Variance (LCV) | (SH × SR) - (AH × AR) Standard Cost - Actual Cost |
| Labour Rate Variance (LRV) | AH × (SR - AR) Actual Hours × (Std Rate - Actual Rate) |
| Labour Efficiency Variance (LEV) | SR × (SH - AH) Std Rate × (Std Hours - Actual Hours) |
| Labour Mix Variance (LMV) | SR × (RSH - AH) Std Rate × (Revised Std Hours - Actual Hours) |
| Labour Yield Variance (LYV) | SR × (SH - RSH) Std Rate × (Std Hours - Revised Std Hours) |
| Idle Time Variance | Idle Hours × SR Abnormal idle time × Standard rate |
Relationship: LCV = LRV + LEV = LRV + LMV + LYV
Worked Example: Labour Variances
Standard
2 hours @ ₹100/hour per unit
Output: 100 units
SH = 200 hrs, SR = ₹100
Actual
220 hours worked
@ ₹95/hour
AH = 220 hrs, AR = ₹95
LRV = AH × (SR - AR) = 220 × (100 - 95) = ₹1,100 (F)
LEV = SR × (SH - AH) = 100 × (200 - 220) = ₹2,000 (A)
LCV = LRV + LEV = 1,100 (F) + 2,000 (A) = ₹900 (A)
Verify: LCV = (SH × SR) - (AH × AR) = (200 × 100) - (220 × 95) = 20,000 - 20,900 = ₹900 (A) ✓
Overhead Variances
| Variance | Formula |
|---|---|
| Variable OH Cost Variance | (SH × SR) - Actual VOH Absorbed VOH - Actual VOH |
| Variable OH Efficiency Variance | SR × (SH - AH) Std Rate × (Std Hours - Actual Hours) |
| Variable OH Expenditure Variance | (AH × SR) - Actual VOH Budgeted VOH for AH - Actual VOH |
| Fixed OH Cost Variance | Absorbed FOH - Actual FOH (SH × SR) - Actual FOH |
| Fixed OH Volume Variance | Absorbed FOH - Budgeted FOH SR × (SH - Budgeted Hours) |
| Fixed OH Expenditure Variance | Budgeted FOH - Actual FOH Budget - Actual spending |
| Fixed OH Efficiency Variance | SR × (SH - AH) Std Rate × (Std Hours - Actual Hours) |
| Fixed OH Capacity Variance | SR × (AH - Budgeted Hours) Std Rate × (Actual - Budget Hours) |
| Calendar Variance | SR × (Revised Budget Hrs - Budget Hrs) Due to different working days |
FOH: Cost Variance = Volume Variance + Expenditure Variance
Volume: = Efficiency Variance + Capacity Variance (+ Calendar Variance)
Worked Example: Fixed Overhead Variances
Budget
Budgeted FOH = ₹50,000
Budgeted Hours = 1,000 hrs
FOH Rate (SR) = ₹50/hr
Actual
Output: 90 units (Std: 10 hrs/unit)
Actual Hours = 920 hrs
Actual FOH = ₹52,000
SH = 900 hrs, AH = 920 hrs
Absorbed FOH = SH × SR = 900 × 50 = ₹45,000
FOH Expenditure = Budget - Actual = 50,000 - 52,000 = ₹2,000 (A)
FOH Volume = Absorbed - Budget = 45,000 - 50,000 = ₹5,000 (A)
FOH Cost = Expenditure + Volume = ₹7,000 (A)
Breaking down Volume Variance:
FOH Efficiency = SR × (SH - AH) = 50 × (900 - 920) = ₹1,000 (A)
FOH Capacity = SR × (AH - Budget Hrs) = 50 × (920 - 1,000) = ₹4,000 (A)
Volume = Efficiency + Capacity = 1,000 + 4,000 = ₹5,000 (A) ✓
Verify: FOH Cost = Absorbed - Actual = 45,000 - 52,000 = ₹7,000 (A) ✓
Sales Variances
| Variance | Formula |
|---|---|
| Sales Value Variance | Budgeted Sales - Actual Sales (BQ × BP) - (AQ × AP) |
| Sales Price Variance | AQ × (AP - BP) Actual Qty × (Actual Price - Budget Price) |
| Sales Volume Variance | BP × (AQ - BQ) Budget Price × (Actual Qty - Budget Qty) |
| Sales Mix Variance | Std Profit × (AQ - Revised BQ) Due to product mix change |
| Sales Quantity Variance | Std Profit × (Revised BQ - BQ) Due to total quantity change |
Worked Example: Sales Variances
Budget
Budgeted Sales: 1,000 units
Budgeted Price: ₹200/unit
BQ = 1,000, BP = ₹200
Actual
Actual Sales: 1,100 units
Actual Price: ₹190/unit
AQ = 1,100, AP = ₹190
Sales Price Var = AQ × (AP - BP) = 1,100 × (190 - 200) = ₹11,000 (A)
Sales Volume Var = BP × (AQ - BQ) = 200 × (1,100 - 1,000) = ₹20,000 (F)
Sales Value Var = Price + Volume = ₹9,000 (F)
Verify: Budget Sales = 1,000 × 200 = ₹2,00,000 | Actual Sales = 1,100 × 190 = ₹2,09,000 | Variance = ₹9,000 (F) ✓
Important Tips for Exam
- ★ Favourable (F) variance: Actual < Standard (profit increases)
- ★ Adverse (A) variance: Actual > Standard (profit decreases)
- ★ Material: MCV = MPV + MUV = MPV + MMV + MYV
- ★ Labour: LCV = LRV + LEV = LRV + LMV + LYV
- ★ Always check if variance is asked at INPUT level or OUTPUT level
- ★ For overhead recovery rate: Budget OH ÷ Budget Hours
- ★ Reconciliation: Actual Profit = Budget Profit ± Variances
Practice Cost Accounting MCQs
Test your understanding with chapter-wise questions.