Calculate variances

lindas1967

Cast stone 10kg @£20,00=£200,00
Cast stone 7.800kg 159,900
Standard cost would it be 7800*20=156000-159,900=3900a
How would I work out the stone usage

SandyHood

Dear Linda1967

Thank you for your question.
From the information you've provided, I'm not able to identify the material usage variance.

If you can find the number of units of finished goods produced that would be sufficient.
Units produced x 10kg per unit x £20.00 per kg = the standard cost of goods produced
if you then take away the
standard cost of the material input [7,800 kgs x £20 = £156,000]
that will give you the
Material usage variance

If you have the units produced, brilliant.
If you don't, please let me know any other additional information you have.

Yours

lindas1967

Hi thank you for that there are 800 units the budget was 1000

SandyHood

Dear Linda1967

I guess this post isn't needed
You have no doubt worked out the answer yourself
Units produced x 10kg per unit x £20.00 per kg = the standard cost of goods produced
if you then take away the
standard cost of the material input [7,800 kgs x £20 = £156,000]
that will give you the
Material usage variance

800 x 10kg/unit x £20.00/kg =£160,000
less
7800kgs x £20 per kilogram = £156,000
Material usage variance £4,000 favourable

They used 200kgs less than you'd expect for 800 units of finished goods
200kgs at £20/kg = £4,000 favourable

Yours

lindas1967

Hi thank you I just wanted to make sure I got the answer right