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Hi my Dear Tutor, I have a question.
it asks to find adverse material usage variance but there is a setback
Actual usage-22000
Revised usage-20000
(8000*2.5)
adverse material operational usage 2000*4$=8000Revised usage calculated by taking into consideration of budgeted standar kg of material x, The question does not mention revised standar kg of material x and i think there is no any rule that we should take budgeted standar kg of any material as revsied kg.
Could you explain it please?
thanks in advance
The only thing that this question says is revised is the cost per kg of material X.
There is no mention of the standard usage being revised and therefore it isn’t revised. So they should still be using 2.5kg per unit and any difference from this is an operational variance.
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