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materials price variance

Jjosy8712y ago
Hi Sir John, please I'd need help with this. Beech LTD has budgeted on producing 12 000 desks. the standard usage of wood is 1.5 per metres per desk at a standard cost of $5 per metre. the actual production is 15000 desks and use 24000 metres of wood at a cost of 108000. find the material price variance. I got 12000 fav, but the answer is adverse, I don't know why as I presume, they budgeted the cost of material at $5 but +they did buy at $4.5.
John MoffatJohn MoffatTutor12y ago#1
It is favourable. (The answer is wrong and I will have it corrected - sorry :-( )
Jjosy8712y ago#2
thanks you Sir
John MoffatJohn MoffatTutor12y ago#3
You are welcome :-)
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