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Quantity variance

Updated: Aug 20, 2021

Quantity variance

When producing from raw materials, one starts off by calculating a standard price. But is this standard price correct in relation to the quantity produced from the raw materials.

Quantity variance is used to indentify differences between the calculated standard quantity and the actual quantity acheived during production, so that a standard price can be as accurate as possible.

However, this calculation must be done at regular interval, as its guideline will not last forever.

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James Knight
Editor of Education
James is a lead content editor for Invezz. He's an avid trader and golfer, who spends an inordinate amount of time watching Leicester City and the… read more.