Planning cost method, material cost variance rate calculation Suppose a company has 10 tons of materials in stock at the beginning of the period, the planned cost is 17800 yuan, and the material cost difference is 250 yuan; the total cost of purchasing 10 tons of materials this month is 17600 yuan The difference rate of material cost in this month is as follows: (250-200)/(17800+17800)*100%=0.14% The above is an example Is the molecule (250-200) and why not (250 + 200)?

Planning cost method, material cost variance rate calculation Suppose a company has 10 tons of materials in stock at the beginning of the period, the planned cost is 17800 yuan, and the material cost difference is 250 yuan; the total cost of purchasing 10 tons of materials this month is 17600 yuan The difference rate of material cost in this month is as follows: (250-200)/(17800+17800)*100%=0.14% The above is an example Is the molecule (250-200) and why not (250 + 200)?

Because the material purchased this month is 200 yuan cheaper than that of last month, that is, 200 less cost. 17600-17800 = - 200
Material cost variance rate of this month = (cost variance of balance materials at the beginning of the month + cost variance of income materials of this month) / (planned cost of balance materials at the beginning of the month + planned cost of income materials of this month) × 100%
The cost difference of this month's materials is - 200, so it is a decrease, not an increase