Summary Variances

Summary variances can be calculated for both labor and material. Consider the information shown below:

Direct Material Direct Labor

Planned price/unit $ 30.00 $ 24.30

Actual cost $554,630 $236,200

We can now calculate the total price variance for direct material and the rate cost variance:

• Total price variance for direct material

= Actual units X (BCWP - ACWP) = 17,853 X ($30.00 - $31.07) = $19,102.71 (unfavorable)

• Labor rate cost variance

= Budgeted rate - Actual rate = $24.30 - $26.24 = $1.94 (unfavorable)

Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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