Home For AAT student members AQ 2013 AAT Level 4 (Level 8 in Scotland)
Current updates regarding coronavirus (Covid-19) and the precautions AAT are taking will be continually updated on the below page.

Please check this link for the latest updates:
We hope you are all safe and well and if you need us we will be here. 💚

Financial Performance question - nerves kicking in!

wajoda2002wajoda2002 Feels At HomeRegistered Posts: 28

Can someone help with this please? I keep getting the answer to £2,600, however the answer is £2,500

A company that produces Jetsams has standard cost information of 0.65kg of material at £25.00 per kg for each Jetsam.

During September, 4,000 Jetsams were produced, using 2,700 kg of material that cost £67,600.

Complete the following table using the drop down menus to show the material variances.

Direct material usage variance?



  • wajoda2002wajoda2002 Feels At Home Registered Posts: 28
    Sussed it. Thank you
  • DsindleDsindle Feels At Home Registered Posts: 39

    This is how its worked out:

    You used 2700kg but you should have used 2600kg (0.65 x 4000) - resulting in a difference of 100kg @ £25.00 each = £2500

    For usage variances you need to remember its comparing what you 'should have' used against what you 'did' use.

    Hope this helps....
  • deep0075deep0075 Just Joined Registered Posts: 2
    here is the answer:

    .65x4000=2600 standard production qty

    standard rate is 25(standard production qty- actual production qty)



    = 2500 adverse
Sign In or Register to comment.