Question 5: A Mechanical Design Company produces an innovative design of Batttery used for electric cars. The standard design of producing one(1) unit of Battery is provided in the bill of materials BOM which requires material mix shown in Table Q5a. The current monthly production of Battery is 2000 units per month with the actual material consumption shown in Table Q5b. Determine the following and justify why it is favorable or adverse. (6) Material usage variance; (i) Material price variance; (ii) Total material cost variance; Table Q5a Materials Usage (units) Total cost (OMR) V 17 W 3 38 50 38 Y 2 Table Q5b Total cost (OMR) 50,478 93,522 104,477 76.889 Materials Usage (units) 12,027 6,879 17,231 4,347 V Y

Question 5: A Mechanical Design Company produces an innovative design of Batttery used for electric cars. The standard design of producing one(1) unit of Battery is provided in the bill of materials BOM which requires material mix shown in Table Q5a. The current monthly production of Battery is 2000 units per month with the actual material consumption shown in Table Q5b. Determine the following and justify why it is favorable or adverse. (6) Material usage variance; (i) Material price variance; (ii) Total material cost variance; Table Q5a Materials Usage (units) Total cost (OMR) V 17 W 3 38 50 38 Y 2 Table Q5b Total cost (OMR) 50,478 93,522 104,477 76.889 Materials Usage (units) 12,027 6,879 17,231 4,347 V Y

Name: Question 5:A Mechanical Design Company produces an innovative design
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Description: Question 5:A Mechanical Design Company produces an innovative design of Batttery used for electric cars. The standard design of producing one(1) unit of Battery is provided in the bill of materialsBOM which requires material mix shown in Table Q5a.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter10: Standard Costing And Variance Analysis

Section: Chapter Questions

Problem 44E: Sommers Company uses the following rule to determine whether materials usage variances should be...

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