The following materials standards have been established for a particular product Standard quantity per unit of output 4.5 meters $18.50 per meter The following data pertain to operations concerning the product last month Actual materials purchased Actual cost of materials porchases Actual materials used in production Actual outp 7.300 5151.320 7.300 meters 1560 What is the materials price variance for the month $7,020 U $5,432 U $13,260 U $8,300 U

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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.