Accounting Assignment | Custom Assignment Help
August 29th, 2019
PP Ltd operates a standard absorption costing system. The following information has been extracted from the standard cost card for one of its products:
- Budgeted production 1500 units
- Direct material cost: 7 kg × £4.10 £28.70 per unit
- Actual results for the period were as follows:
- Production 1600 units
- Direct material (purchased and used): 12 000 kg £52 200
It has subsequently been noted that due to a change in economic conditions the best price that the material could have been purchased for was £4.50 per kg during the period.
Required
1 Calculate the material price planning variance.
2 Calculate the operational material usage variance.
