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Many thanks for your help.
the following information relates to april production of product CK.
Actual Budget.
units produced 580 600
Input of material 1566 1500
cost of material
purchased and input 77517 76500what is the material usage variance . my Answer and the book answer is exactly the same. the answer is is 5916 Adverse.
the method used in the book is as follows.
AQ*SP Equals 1566*76500/1500 equals 79866
SQ*SP Equals 580*1500/600*76500/1500 Equals 73950. the usage variance is 5916 Adverse.I have done my arithmetic the way you have done which I found easier although the answer ends up the same I want to double check weather the way I have done my Arithmetic is correct.
Actual usage 1566 kg
std usage for the actual production 580*2.50 equals 1450
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116 kg Adverse *51 equals 5916 A.I really really appreciate for your help I feel confident to deal with standard costing question extracts now. Many thanks.
What you have done is fine (and in the exam it is only the final answer that get the marks – nobody checks your workings and so it is fine calculating it the way you have done 🙂 )
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