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MA REVISION MOCK EXAM SECTION B QUESTION 2 A
Can you explain how the material variance and usage come to those numbers I can’t figure it out
Thank You
Please tell me which mock exam you are referring to.
(Also, have you watched my free lectures on variance analysis?)
https://opentuition.com/acca/ma/ma-revision-mock-exam/
Yes I watched the lecture, I’d still appreciate an explanation, Thank You.
For the price variance:
They used 24,000 metres of wood and so should have spent 24,000 x $5 = $120,000
They actually spent $108,000 and so there is a favorable price variance of the difference of $12,000.For the usage variance:
They produced 15,000 desks and so should have used 15,000 x 1.5 = 22,500 metres of wood.
The actually used 24,000 metres, which is 1,500 more than they should have.
Therefore there is an adverse usage variance of 1,500 x $5 = $7,500.
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