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Standard Direct Material cost ( 12.5kg @4 per kg )
The actual amount paid for 45,600kg material purchased and used was 173,280 and direct material usuage variance was $15,200 adverse.
Find actual production last month.
Thanks.
Please don’t simply give me an instruction (“find actual production”)!
Say what your difficulty is.The usage variance is the difference between the actual usage and the standard usage for the actual production, costed at the standard cost per kg.
Since the usage variance was $15,200, it must mean that they used 15,200/4 = 3800 kg more than they should have done. They actually used 45,600 kg, and so the standard usage for the actual production must have been 45,600 – 3800 = 41,800 kg.
You know the standard usage per unit (12.5kg) so now you should have no problem calculating the actual production.
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