Calculate Material price variance. Material usage variance and material cost variance from the following data. Analyse the probable reasons for adverse variances if any. Standard Material for 70 kgs of finished Goods: 100 kg Price of material OMR 1 per kg Actual Output 210,000 Kg Material used 280,000 kg Cost of material OMR 252,000
Calculate Material price variance. Material usage variance and material cost variance from the following data. Analyse the probable reasons for adverse variances if any. Standard Material for 70 kgs of finished Goods: 100 kg Price of material OMR 1 per kg Actual Output 210,000 Kg Material used 280,000 kg Cost of material OMR 252,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Calculate Material price variance. Material usage variance and material cost variance from the following data. Analyse the probable reasons for adverse variances if any.
Standard
Material for 70 kgs of finished Goods: 100 kg
Price of material OMR 1 per kg
Actual
Output 210,000 Kg
Material used 280,000 kg
Cost of material OMR 252,000
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