| VARIANCES | FAVORABLE | ADVERSE |
| Material Price | Unforeseen discount received Greater care in purchasing Change in material std | Price increase careless purchasing change in material std |
| Material Usage | DM used of higher quality Effective use of DM | Defective material Waste; theft |
| Labour Rate | Pay lower | Wages increase |
| Idle Time | Always adverse | Mac breakdown; illness |
| Labour Efficiency | High motivation Better quality of DM and Mac | Lack of training Low motivation |
| Overhead Expenditure | Saving in cost More economical use of service | Increase in service costs Excessive use of services |
| Overhead volume | Production greater than budgeted | Production less than budgeted |
| Selling Price | Unplanned price – increase in market demand, decrease in market supplies | Vice-versa |
| Sales Volume | Additional demand | Fall in demand, production difficulties. |
Inter-relationship between variances:-
- Material Price and Usage - cheaper materials, adverse usage, lower labour efficience.
- Labour rate and efficiency - high labour rate (high skill), high efficiency, favorable usage.
- Selling Price and volume - lower price, higher sales demand
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