Quantity Variance

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Quantity Variance

The difference between sales actually made and the estimated sales, multiplied by the sales price, over a period of time. For example, suppose a company expects to sell 1,000 units at $5 per unit each week. If it sells 1,200 units in week one, its quantity variance is $1,000 ([1,200 - 1,000] * $5). Likewise, if it only sells 700 in week two, the variance is -$1,500 ([700 - 1,000] * $5).
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Unfavorable quantity variances result from using more food than the standard allowance for the number of meals served.
Favorable quantity variances result from using less food than anticipated, given the number of meals served.
If the scenario involves a firm selling multiple products and/or a product that requires a mix of different inputs, you should calculate sales mix and sales quantity variances and/or material mix and yield variances.
Corcentric solutions for the retail industry enable retail finance professionals to manage unique challenges such as managing multiple store locations that need to receive and approve invoices, providing invoice approval workflow for different levels of authority from store to store, handling frequent price and quantity variances that slow down the three way matching process, accelerating invoice processes despite delays in receiving goods, and meeting tight store opening deadlines for new store expansions that require efficient handling of inventory and non-inventory related invoices.
Then we calculate the Direct Labor Price and Quantity Variances by subtracting the products as shown in row 8 of Figure 3.
Bob's ended up with unfavorable quantity variances for all raw materials primarily because of its new workforce.
In his report Mr Arnold said: "The consistent use of purchase order numbers by suppliers, the handling of price and quantity variances by Central Payments and authorisers in directorates, disciplines of running maintenance processes in Voyager to clear price and quantity variances, and understanding the difference between rejecting and referring an invoice were cause for concern.
Materials quantity variances are normally the responsibility of which department?
The quantity variance is determined by multiplying the standard price for the materials times the difference between the quantity expected to be used for the number of products made (200 ounces) and the actual quantity used (250 ounces).
Price and resource quantity variances are also highly influential and are reported individually although the cost center manager may not personally be responsible for purchase price variance.