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Hi guys please help
in part a for material usage variance i am not getting the standard quantity as per the acca answer which is 4,000. am getting something else…the part for price variance is ok…
unable 2 work part b also
For part (a), you need to calculate how much material 100,000 cards should have used, in comparison to how much material 100,000 cards did use, multiplied by the standard rate per kg. Therefore:
Should 100,000 * 0.04 = 4,000kg
Actual 100,000 * 0.035 = 3,500kg
Variance = 500kg (F)
cost per kg = $4
Answer 500kg * $4 = $2000 (F)I found part B very tricky, but got it eventually. Here’s my workings.
Price Planning:
Original 100,000 * 0.042 * 4 = $16,800
Revised 100,000 * 0.042 * 4 * 1.2 = $20,160
Variance = $3,360 (A)Price Operational:
Revised 100,000 * 0.035 * 4 * 1.2 = $16,800
Actual 100,000 * 0.035 * 5.25 = $18.375
Variance = $1,575 (A)Usage Planning:
Original 100,000 * 0.04 = 4000kg
Revised 100,000 * 0.04 * 1.05 = 4200
Variance = 200kg (A) * $4 = $800 (A)Usage Operational:
Revised = 4200kg
Actual 100,000 * 0.035 = 3500kg
Variance = 700 (F) * $4.8 = $3360 (F)
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