Current Attempt in Progress During March, Indigo, Inc. purchases and uses 10,900 pounds of materials costing $45,235 to make 5,000 tiles, Indigo's standard material cost per tile is $8.20 (2 pounds of material x $4.10). Compute the total, price, and quantity material variances for Indigo, Inc. for March, Identify whether each variance is favorable or unfavorable. Total Materials Variance Materials Price Variance Materials Quantity Variance $ Favorable Unfavorable 4 # 9
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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