The standard materials cost of a product is 5kg $7.50 per kg = $37.50. Actual production
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Question:
The standard materials cost of a product is 5kg × $7.50 per kg = $37.50. Actual production of 10,000 units used 54,400kg at a cost of $410,000.
In retrospect, it was realised that the standard materials cost should have been 5.3kg per unit at a cost of $8 per kg. The standard cost was revised to this amount.
Required:
1) Calculate the materials planning and operational variances in as much detail as possible.
Related Book For
Financial and Managerial Accounting the basis for business decisions
ISBN: 978-0078111044
16th edition
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello
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