In a period, 11,280 kg of material were used and should have cost (according to the standard cost card) £46,248. The material usage variance was £492 A. How much material should the company have used in its production, according to the standard?
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.
In a period, 11,280 kg of material were used and should have cost (according to the
How much material should the company have used in its production, according to the standard?
A) 10,788 kg
B) 11,160 kg
C) 11,280 kg
D) 11,400 kg
Step by step
Solved in 3 steps with 1 images
