MATERIAL USAGE VARIANCE QUESTION- please help...
gabriellenlewis
Registered Posts: 129
A company purchases 200,000 litres of material at a cost of £0.55 per litre.
The budgeted production was 22,000 units which requires 220,000 litres of material.
The actual production was 19,000 units.
What is the material usage variance?
Please explain, thanks.
The budgeted production was 22,000 units which requires 220,000 litres of material.
The actual production was 19,000 units.
What is the material usage variance?
Please explain, thanks.
0
Comments
-
Budget / Std = (220,000/22,000) thus 10 litres per unit.
If you made 19,000 units with the purchased 200,000 litres then your adverse 10,000 because it should have been 190,000 (10 litres x 19,000 units).0 -
Thanks for your response, @richiebkerry ...I thought the exact same but it's for one of the practice assessments and the answers say £6000?0
-
So with your answer, it would be £5500 if multiplied by the standard cost per unit (£0.55). But the answr is meant to be £6000, which i don't see how?! @richiebkerry0
-
You didn't give a standard price, only actual?0
-
Oh i'm sorry @richiebkerry , the total standard cost is £132,000... ?0
Categories
- All Categories
- 1.2K Books to buy and sell
- 2.3K General discussion
- 12.5K For AAT students
- 321 NEW! Qualifications 2022
- 164 General Qualifications 2022 discussion
- 11 AAT Level 2 Certificate in Accounting
- 56 AAT Level 3 Diploma in Accounting
- 87 AAT Level 4 Diploma in Professional Accounting
- 8.8K For accounting professionals
- 23 coronavirus (Covid-19)
- 272 VAT
- 92 Software
- 273 Tax
- 135 Bookkeeping
- 7.2K General accounting discussion
- 200 AAT member discussion
- 3.8K For everyone
- 38 AAT news and announcements
- 345 Feedback for AAT
- 2.8K Chat and off-topic discussion
- 582 Job postings
- 16 Who can benefit from AAT?
- 36 Where can AAT take me?
- 42 Getting started with AAT
- 26 Finding an AAT training provider
- 48 Distance learning and other ways to study AAT
- 25 Apprenticeships
- 66 AAT membership