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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)
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Q1 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)
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so does that mean we are right or
and post more as im hvng my exams on 27march 2013 cbea.
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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