Material Usage Variance Help

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Joe725
Joe725 Registered Posts: 3
edited October 2017 in Management Accounting: Decisions and Control
Hi, im having trouble working out the usage variance on AAT Mock 2 1.2 Materials usage variance?
I thought the variance would be
AQU x SR
960 x 36 = £34,560
SQAP x SR
(300 x 3) x 36 = £32,400
But i appear to be wrong as the answer is £720 Adverse
Is this because i've not done the variance per unit?
Thanks

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  • N4T
    N4T Registered Posts: 191
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    Hi @Joe725,

    I don't have access to the question as I sat AQ2013. If you put the £, kg, units next to the figures it should be easier to spot where you went wrong.

    i.e 960kg x £36 per kg = £34,560
    300 units x 3kg/unit = 900kg x £36 per kg = £32,400

    Looking at your figures above:
    Actual quantity is 960kg
    Standard price is £36 per kg
    Actual production is 300 units
    Standard quantity is 3kg per unit

    One of these 4 figures is incorrect. Which one?

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