MABU - Assesment 2 Q6 C HELP!

BethRoberts21
BethRoberts21 Registered Posts: 6
in Management Accounting: Budgeting
Hi guys

I've been staring at this question for an hour now and still can't work it out...I'm sitting my exam in a few days and starting to freak :(



Any ideas?

Thanks in advance!

Comments

  • HWesham
    HWesham Registered Posts: 4
    Hi,
    To find the standard cost of material take the budget cost and divide by budget units and then multiply by the actual units. (272800 / 15500 x 15200)
    Material price is budget cost divided by material (kg) = std price per kg multiplied by actual material used (272800 / 12400 = £22 per std kg, £22 x 11400 = 250800) This is what the materials should have cost. Then just subtract the actual figure to get the variance (250800-257640 = an adverse variance of £6840.

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