the standard direct material cost per unit for a product is calculated as follows:
10.5 litres at $2.50 per litre.
Last month the actual price paid for 12,000 litres of material used was 4% above standard and the direct material usage variance was $1815 favourable. no stock material are held.
Q1: what was the adverse direct material price variance for last month?
Q2" what was the actual prodcution last month? (in units)
ACCA Forums
MAstandard costing and variances analysis (discuss)
13y ago#1Q1 FORMULA
AQ X AP - AQ- SP
nt sure but I think this what I would have done
given SP= 2.50
AP=2.50*4/100=0.10 SO AP=2.5+0.10=2.6
AQ=12,000 THEREFORE 12,000*2.6-12,000*2.5=31,200-30,000=(1,200)
my ans is 1200 too,but the ans given is 1212. faint.
my ans is 1200 adverse too...
13y ago#4so does that mean we are right or
and post more as im hvng my exams on 27march 2013 cbe
a.
12000 litters should have cost : 12000*2.5=30000
But actually it costed 12000*2.5*1.04=31200
So the dircect material variance = 1200
b.
standard material cost for the standard production= 12000*2.5=30000
material usage variance = 1815 (F)
standard material cost for the actual production = 30000+1815=31815
Actual production = 31815/( 2.5*10.5)=1212
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