Usage Variance

Usage Variance

The difference between estimated inputs in a production process and actual inputs, multiplied by their cost, over a period of time. For example, suppose a company expects to use 1,000 hours of work at $5 per hour each week. If it needs to pay for 1,200 hours in week one, its usage variance is $1,000 ([1,200 - 1,000] * $5). Likewise, if it only needs to pay for 700 hours in week two, its variance is -$1,500 ([700 - 1,000] * $5). Obviously, negative usage variance reduces costs while positive variance increases them.
References in periodicals archive ?
and material usage variance Actual output did use 35,000kg Actual output should have used: 9,000 units x 4kg 36,000kg Operational usage variance 1,000kg (F) Material usage variance: 1,000kg x $25/kg $25,000 (F) But the question scenario adds that "the general market price at the time of purchase for ingredient A was $23 per kg".
However, usage variance among members ranged from 1% to 18% by credit union.
26 port meeting, the port's attorney Peter Fraley said the Tramps received a usage variance to the industrial park's covenants, conditions and restrictions (CC&R's) to allow the hotel operation when they purchased 4 acres on Penny Road between Chester Kimm Road and Euclid Avenue in 2005.
Other candidates, while they didn't calculate labour or overhead variances, worked out the material usage variance. This meant that there was a duplication of variances, because the material usage variance is a combination of the material mix variance and the material yield variance.
For example, waste material will be apparent (material usage variance), as will stock shortages and machine breakdowns (volume and efficiency variances).
For example, if material usage variances are high and equipment usage is high, it may appear as if the asset is near failure, in this case however, excessive energy usage could simply be due to poor material or formula quality and the equipment is performing properly.
"Our goal is to increase NOI by driving usage variances to zero," Apostolos says.
Generic Certificates of Conformance can be replaced with a report that includes SPC and Cpk analysis, unexpected manufacturing variances (such as longer cycle time for a specific feature), and even down to the minute details including tooling usage variances and lead-time information on raw materials.
The computer system tracks and reports the material and labor usage variances. Labor rate variances are obtained from the payroll system.
* Cost Management Systems: Including, at least, weekly materials usage variances tied to specific products and operating lines.