Material cost variance savings should be credited.
The material cost difference account is used to calculate the difference between the actual cost and the planned cost of various materials of the enterprise. The debit side registers the difference (overexpenditure) when the actual cost is greater than the planned cost and the difference in savings that should be borne by the issued materials. And when adjusting the planned cost of inventory materials, adjust the reduced planned cost. The credit registers the difference (savings) between the actual cost and the planned cost, as well as the overrun difference that should be borne by the issued materials, and adjusts the increased planned cost when adjusting the planned cost of inventory materials. Extended information
Calculation formula
Material cost difference = actual cost - planned cost
The difference is a positive number, which means that the actual cost is larger, which is called "overrun difference" ( Debit); the difference is a negative number, indicating that the actual cost is smaller, which is called "savings difference" (credit). When issuing materials, the planned cost is carried forward first, and then adjusted to the actual cost.
The formula is transformed into:
Actual cost = planned cost + material cost difference
In this formula, if the material cost difference is a positive number, add it, if it is a negative number, add it Just reduce.
Material cost variance rate = (material cost difference in balance at the beginning of the month + material cost difference in revenue this month)/(planned cost of materials in balance at the beginning of the month + planned cost of materials revenue in this month)*100%< /p>
Baidu Encyclopedia - Material Cost Difference