[Verse 1]
When actual costs don't match the plan
Standard versus real, we need to understand
Direct materials bought at different rates
Price variance shows us what awaits
Take the difference, multiply units bought
Favorable or adverse, that's what we've caught
[Chorus]
A-Q times S-P that's the quantity way
S-Q times A-P for the price we pay
Actual quantity, standard price combined
Standard quantity, actual price aligned
Material and labor, variances we find
Efficiency and pricing, peace of mind
[Verse 2]
Material quantity tells another tale
Did we use too much or did we fail
Standard quantity minus what we used
Times standard price, the variance produced
Efficiency matters in the factory floor
Less waste means profits we can't ignore
[Chorus]
A-Q times S-P that's the quantity way
S-Q times A-P for the price we pay
Actual quantity, standard price combined
Standard quantity, actual price aligned
Material and labor, variances we find
Efficiency and pricing, peace of mind
[Verse 3]
Labor rate variance works the same
Actual rate versus standard, that's the game
Hours worked times the rate difference
Shows us payroll's performance reference
Did we pay more or did we save
Rate variance tells us how we behaved
[Bridge]
Favorable means we beat the standard set
Adverse means we're not there yet
Investigate the large ones first
Find the cause before it gets worse
Price variances blame purchasing power
Quantity variances blame the production hour
[Chorus]
A-Q times S-P that's the quantity way
S-Q times A-P for the price we pay
Actual quantity, standard price combined
Standard quantity, actual price aligned
Material and labor, variances we find
Efficiency and pricing, peace of mind
[Outro]
Labor efficiency, hours used in vain
Standard hours minus actual, times the standard rate again
Four variances total, two for each resource
Price and quantity, staying on course
Management by exception, focus where it counts
Variance analysis, that's what this amounts