Technical Note | HBS Case Collection | November 1995

Analyzing Standard Costs: Technical Note

by V.G. Narayanan


Explains variance analysis. Concepts of price variance and quantity variance are introduced to analyze prime cost variances. Spending variance and capacity variance are used to analyze overhead variance. Consistent with conducting variance analysis in an activity-based costing setting. All concepts are illustrated graphically.

Keywords: Cost Accounting; Cost; Analysis;


Narayanan, V.G. "Analyzing Standard Costs: Technical Note." Harvard Business School Technical Note 196-109, November 1995.