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variance

Ddarsh199710y ago
Standard Cost -Direct materials (28,600 kg at $2) = $57,200 Actual results -Direct materials (28,400 kg at $2.05)=$58,220 Material Usage Variance is $1420(A) How to obtain this answer?
John MoffatJohn MoffatTutor10y ago#1
Are you sure there is no more information given in the question (because it is not possible to answer without more information)? I assume that you have watched my free lectures, in which case you will know that the material usage variance is the difference between the actual usage and the standard usage for the actual production, multiplied by the standard cost per kg..
Ddarsh199710y ago#2
Dear sir, I do have watched your lectures concerning variance however in the BPP revision kit, it has been asked to calculate the fixed production capacity variance? What is fixed production capacity variance and how it is calculated?
John MoffatJohn MoffatTutor10y ago#3
It is the fixed overhead capacity variance, and how to calculate this is covered in the free lectures on variances.
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