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MABU Sample Assessment 1 Q1.6

Hi all,

I was wondering if anyone would be able to divulge into how they calculate the whole of this question (Not A).

I have my exam in a few weeks time so I am getting stuck into practice questions and I am finding this particular task troublesome!

Thank you.

AlisonSwanson

Comments

  • ShortagesShortages Registered Posts: 5
    1.6 (B)

    The operating statement for October showed that direct raw material costs were £142,560.
    9900KG of material were used and 6000 items were made and sold.
    The standard cost allows 1.6 Kilograms (KG) of material for each item at a standard price of £14.50 per KG.

    (b) Complete the table of direct raw material costs, indicating whether each variance is favorable or adverse.

    Direct raw material costs

    Flexed Budget (standard cost) £

    Actual material price per kg (correct to 0.01) £

    Actual Material used per item (correct to two decimal places) KG

    Price Variance £

    Usage Variance £

    Cost Variance £

    Cost variance percentage (correct to one decimal place) %


    I will post question C in an additional comment as I am sure I will run out of space.

    Thanks again!
  • ShortagesShortages Registered Posts: 5
    (c) Prepare the direct labour cost statement from the activity data provided.
    Round to the nearest whole number if necessary.


    Activity Data Items Labour Hrs Cost £
    Budget 18,300 3,660 65,880
    Actual Results 18,800 4,700 82,720

    Direct Labour cost of production

    Standard labour cost of production £

    Variances £ Fav/Adv
    Labour Rate
    Labour Efficiency
    Labour Cost

    Thank you :)
  • ShortagesShortages Registered Posts: 5
    1.6 (B)

    The operating statement for October showed that direct raw material costs were £142,560.
    9900KG of material were used and 6000 items were made and sold.
    The standard cost allows 1.6 Kilograms (KG) of material for each item at a standard price of £14.50 per KG.

    (b) Complete the table of direct raw material costs, indicating whether each variance is favorable or adverse.

    Direct raw material costs

    Flexed Budget (standard cost) £

    Actual material price per kg (correct to 0.01) £

    Actual Material used per item (correct to two decimal places) KG

    Price Variance £

    Usage Variance £

    Cost Variance £

    Cost variance percentage (correct to one decimal place) %


    I hope this makes sense, I can send you a link to the exam also if that helps.

    http://www.aat-interactive.org.uk/elearning/Sample_assessments_AQ2016/AQ2016_L4_MABU_Sample_1/index.html

    There is also a part C which I will post in an additional comment.

    Thanks again!
  • alexnwaalexnwa Registered Posts: 21
    edited February 2018
    It is better to start the solution from Price, usage and cost variance. As you can see below:

    Price Variance: 9900*14.50=143,550 - 142560= 990 F
    Usage Variance: 6000*1.6*14.50=139200-143550= -4350
    Cost Variance= 990 + -4350= -3360
    Flexed budget= 142560 -3360(-3360 is from the cost variance) and the answer: 139,200
    Actual material price per kg (correct to 0.01) £142,560/9900=14.40
    Actual Material used per item (correct to two decimal places) KG:9900/6000=1.65
    alexbraam
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