MDCL - Variance Help
Joe725
Registered Posts: 3
I'm doing the AAT MDCL Sample 2 and can't work out the variance, i'm terrible with them. It's 1.2
I thought the Variance would be:
300 x 30 = 9,000
300 x 36 = 10,800
Meaning variance of 1,800 but the answers it's 1,920.
Also i'm struggling to even start to work out the Usage variance, if anyone could help that'd be great!
I thought the Variance would be:
300 x 30 = 9,000
300 x 36 = 10,800
Meaning variance of 1,800 but the answers it's 1,920.
Also i'm struggling to even start to work out the Usage variance, if anyone could help that'd be great!
0
Comments
-
If you are doing the material price variance, I presume you already calculated the actual material cost to be £9,600.
We are told that the material actually cost £10/kg.
We are also told that the standard material per unit is 3kg, so the standard cost is £12/kg (£36 per unit/3kg)
Each kg therefore cost £2 below standard (favourable)
How many kg did they use?
The total cost was £9,600 and the cost per kg was £10, so they used 960kg
Therefore the total material price variance is 960kg x £2/kg = £1,920 (favourable)
For further guidance, try docs.wixstatic.com/ugd/9a8e75_f0f54f3053e64e40843adb41aa27c44d.pdf
or meadowgatetraining.co.uk/encyclopaedia-of-accounting/2 -
You're welcome0
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