Page 380 - F2 - MA Integrated Workbook STUDENT 2018-19
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Chapter 15
Material variances
4.1 Calculations
Actual Quantity × Actual Price
Price variance
Actual Quantity × Standard Price Total variance
Usage variance
Standard Quantity × Standard Price
If there is a change in materials inventory in the year, then the price variance is
based on the quantity of material purchased whilst the usage variance is based on
the actual quantity used.
Variances will be favourable if Actual < Standard and adverse if Actual > Standard
Test your understanding 5
The standard cost card for product F shows that each unit requires 3 kg of
material at a standard price of $9 per kg. Last period, 200 units of F were
produced and $5,518 was paid for 620 kg of material that was bought and
used.
The material variances for the period are:
Material price variance $ A F
Material usage variance $ A F
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