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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › materials price variance
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 🙁 )
thanks you Sir
You are welcome 🙂