Accounting For Material Cost Variance

The measurement of material cost variance is mainly reflected in the links of material income, warehousing and issuance.

The material cost variance of material income warehousing links is collected through the "material cost difference" subjects.

The link of material distribution is the allocation of material cost difference between stock materials and distribution materials, and carry out adjustment.

Material planning cost refers to the daily delivery and storage of enterprise materials, whether it is general classification accounting or detailed classification accounting, which is calculated according to the planned cost.

Its characteristics are: the receipts and receipts are priced according to the planned cost of the materials, the general ledger and subsidiary ledger are registered according to the planned cost, and the difference between the actual cost and the planned cost of the material is accounted for through the "material cost difference" subject.

At the end of the month, the planned cost of material is adjusted to the actual cost through the allocation of material cost variance.

The cost difference of material income is measured.

When purchasing materials, they shall be accounted for in the "material procurement" subject according to the actual cost stipulated in the new guidelines.

When the material is in storage, it will borrow the "raw materials" and other subjects according to the approved material planning cost, and credit the "material purchase" subject according to the actual cost of the material. The difference between the material planned cost and the actual cost is debited or credited.

Difference "subjects.

The contents of the planned cost should be consistent with the actual cost. Except for special circumstances, the planned cost is not allowed to change at any time during the year.

Cost variance measurement of materials issued.

The cost discrepancy that should be borne by the requisitioned materials should be assessed on a monthly basis, not at the end of the season or at the end of the year.

The cost difference that should be borne by the leader material shall be calculated in accordance with the actual cost of the current period, except that the materials for external processing can be calculated on the basis of the initial cost differential rate.

The difference between the initial cost and the current cost differential rate is not large, and it can also be calculated on the basis of the initial cost differential rate.

Once the calculation method is determined, it is not allowed to change at will.

The calculation formula of material cost difference rate is:

The material cost differential rate of this period is (= the difference between the cost of material at the beginning of the period and the cost difference of the incoming materials during the current period) / (the planned cost of the initial material for storage and the planned cost of the material for the current inspection and acceptance) * 100%

The difference in material cost at the beginning of the period = the cost difference of the material at the beginning of the period / the planned cost of the initial balance material x 100%

Cost difference to be issued for the collar material = planned cost of the material to be issued * material cost difference rate.

The accounting of material cost variance should set up the "material cost difference" subject to carry out the general classification and accounting, and make detailed classification and accounting according to categories or varieties.