PEVDec 2008
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jackiepowell
Registered Posts: 72 Regular contributor ⭐
DEc 2008 Pev... Task 1.1 Bi...Direct Material (glass) price variance.
Please help!!! I really havent a clue as to why the AAT have got the answer from.
Could anyone explain why i use those figures?
Thanks
Jackie :crying:
Please help!!! I really havent a clue as to why the AAT have got the answer from.
Could anyone explain why i use those figures?
Thanks
Jackie :crying:
0
Comments

2100 x 5 is 2100 units actually produced x 5 kg  standard usage of glass per panel.
10500kg is actual amount used.
£12 is standard price per kg. Formula is standard price x(standard usuage for actual production less actual amount used)
hope this helps0 
hi
material price variance formula is:
(standard price per kg of glass  actual price per kg of glass) actual kgs used
standard price per kg calculation:if the total cost of material is divided by the total quantity , it will give the std price per kg
£120,000/10,000 kg = £12
actual price per kg calculation:
total cost divided by total qty will give price per kg
£147,000/10,500 kg = £14
actual kgs used calculation:
the actual kgs of glass used in production is given as 10,500 kg
thus
( £12 £14) 10,500 kg = £ 21,000 (A)0
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