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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.
It is favourable.
(The answer is wrong and I will have it corrected – sorry 🙁 )
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