Price variance is calculated as follows:

Price variance = (actual quantity x actual price) – (actual quantity x standard price)

Quantity variance is calculated as follows:

Quantity variance = (actual quantity x standard price) – (standard quantity x standard price)

Price variance calculates the change in the price while the quantity variance calculates the changes in the quantity only.

Variance

Price variance = (actual quantity x actual price) – (actual quantity x standard price)

Quantity variance is calculated as follows:

Quantity variance = (actual quantity x standard price) – (standard quantity x standard price)

Price variance calculates the change in the price while the quantity variance calculates the changes in the quantity only.

Variance