- This topic has 1 reply, 2 voices, and was last updated 3 years ago by
John Moffat.
John Moffat.-
Posts
-
wafiyzariff
- Topics: 8
- Replies: 6
- ☆
The standard raw material cost for a unit of production is 2kg at $4 per kg.Purchases for a period were 13,000 kg at an actual cost of $4.50 per kg.Raw material inventories valued at standard cost,increased by $8000 in the period.Budgeted production for the period was 6000 units but actual production was only 5000 units
Ans: $4000 Adverse
Can you help me with this sir?
John Moffat
- Topics: 57
- Replies: 51295
- ☆☆☆☆☆
You have not said what the question asked for. I guess it would have asked for the materials usage variance.
The actually bought 13,000 kg, but 2,000 kg ($8,000/$4) were used to increase inventory so only 11,000 kg were used in production.
The standard usage for the actual production is 5,000 units a 2 kg = 10,000 kg.
Therefore they used 1,000 kg more than they should have, and therefore the variance is 1,000 x $4 = $4,000 adverse.
wafiyzariff
John Moffat- You must be logged in to reply to this topic.