6 THE MATERIALS PRICE VARIANCE CONSISTS THE DIFFERENCE BETWEEN TOTA...

11-6 The materials price variance consists

the difference between total budgeted fixed

entirely of differences in price paid from stan-

dard. The variable overhead spending variance

overhead cost and the total amount of fixed

overhead cost incurred. If actual costs exceed

consists of two elements. One element is like a

price variance and results from differences be-

budgeted costs, the variance is labeled unfavor-

able.

tween actual and standard prices for variable

overhead inputs. The other element is like a