FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Encinas Company produced 2,300 units that require 6 standard pounds per unit at $1.75 standard price per pound. The company actually used 13,600 pounds in production.
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Step 1
when recording materials used in production, identify the material quantity variance. It is the difference between standard materials supposed to be used and actual materials used in the production.
If the actual material is less than standard material, it means that production effectively used materials and it is called as favorable variance.
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