# Another Financial performance question

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Registered Posts: 23 New contributor 🐸
A company that produces Betas has standard cost information of 0.45kg of material at £50.00 per kg for each Beta

During September, 6,000 Betas were produced, using 2,760 kg of material that cost £137,600.

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

Direct material price variance
Direct material usage variance
Total direct material variance
the answer is 400 f 3000 a 2600 a

I again can't get the right answer

I worked out the following

if we need 0.45kg and the total cost is £50 then 50/1000 = 0.05 per g x 45 = £2.25 for 0.45kg
we need 0.45kg but we used 0.46kg 2760kg total /6000 units = 0.46kg per unit
then 137,600/2760kg = 49.8550724637 this is the actual cost per kg /1000 = 0.04985507246 is per actual g x 45 = 2.2434782607 cost for 0.45kg and 0.04985507246 x 46 = 2.29333333316 is the actual cost for 0.46kg

I know Direct price is (SP-AP)xAU 50-49.86 x 2760 = 386.4F which is close to 400F
I know Direct material is (SU-AU)xSP = 0.45x6000=2700kg standard -2760kg actual x SP £50= 3000A
total material variance 386.4 + -3000 = 2613.6 A close to 2600 A

Are my calculations right?

I know I am close but I know it wont be drop box answers so I need to get it right and the only way I was able to pick up the right figs was because I had what answer I was looking for and worked it out from there :S

katie

• Registered Posts: 466 Dedicated contributor 🦉
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Ill put the answer like the previous if of any help: -

Price Variance:
Standard: 2,760 Kgs @ £ 50 per Kg = 138,000
Actual: Figure Given = 137,600
Variance: 400 (F)

Usage Variance:
Standard: 6,000 Units @ 0.45 Kgs = 2,700 Kgs @ £ 50 = 135,000
Actual 2,760 Kgs @ £ 50 = 138,000
Variance: 3,000 (A)

Standard cost of 1 Unit = £ 50 * 0.45 Kgs = £ 22.50

Total Material Variance:
Standard: 6,000 Units @ £ 22.50 = 135,000
Actual: Figure Given = 137,600
Variance: 2,600 (A)

This is a little long-winded way of working these out, hope it make some sense.