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Need clarification

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › Need clarification

  • This topic has 3 replies, 2 voices, and was last updated 4 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • March 5, 2021 at 9:40 pm #613541
    legendary
    Participant
    • Topics: 1
    • Replies: 19
    • ☆

    Please when calculating material usage variance, do we consider the change in production level or focus on the variance between the “standard material that was suppose to be used to produced “X actual units” and the actual material used in production the “X actual units?

    For example, if actual units is let say 200 & actual usage was 450kg, but budgeted units was 150 and usage 300kg (i.e 2kg per unit) and standard cost per kg is $10.00.

    I thought Total material usage variance should be:
    200 units suppose use = (200 x 2) = 400kg
    but used = 450kg
    Then material usage variance = 50kg Adv
    Variance ($) = 50kg x $10 = $500 Adv

    Can you help assess this?
    Thank you.

    March 6, 2021 at 7:48 am #613684
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54680
    • ☆☆☆☆☆

    That is correct.

    Why not watch my free lectures where this is all explained?

    The lectures are a complete free course for Paper PM and cover everything needed to be able to pass the exam well.

    March 6, 2021 at 9:04 am #613705
    legendary
    Participant
    • Topics: 1
    • Replies: 19
    • ☆

    Thank you John

    March 6, 2021 at 4:11 pm #613772
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54680
    • ☆☆☆☆☆

    You are welcome 🙂

  • Author
    Posts
Viewing 4 posts - 1 through 4 (of 4 total)
  • The topic ‘Need clarification’ is closed to new replies.

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