ORGANIZATION AND STRUCTURE REVIEW
PAPER COMPLETE NOTES
◉ OPERATING LEVERAGE
Answer: CONTRIBUTION MARGIN / OPERATING INCOME
◉ MATERIALS PRICE VARIANCE
Answer: STANDARD PRICE - ACTUAL PRICE
x ACTUAL QUANTITY
(SP-AP) X AQ
◉ MATERIALS QUANTITY VARIANCE
Answer: (Standard Quantity Allowed - Actual Quantity Used) ×
Standard Price
(SQ - AQ) X SP
◉ LABOR RATE VARIANCE
Answer: (ACTUAL RATE - STANDARD RATE) X ACTUAL HOURS
WORKED
(AR-SR) x AH