Price Variance

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.