MAC revised standard

meibaker

i am bit confused why it should be 99% instead of 101%
Q: actual produciton level 5500 units, standard direct material cost of each unit 150 litres @ £1.25 per litre
a new production methods have improved standard material usage by 1% ,
the revised standard usage for the actuall production level, based on the new production methods ?
thanks in advance

bozena

because you need less materials by 1% (production method has been improved), so 100-1=99
therefore you need 150 l-1%=145 l

hope this help
Bozena

meibaker

bozena wrote: »

because you need less materials by 1% (production method has been improved), so 100-1=99
therefore you need 150 l-1%=145 l

hope this help
Bozena

thank you!