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The standard composition of material that is used in the production of product ‘Flurry’ is as follows:   Material.               Cost per kg       Total cost Material F               R3/kg                  R12 Material L               R2/kg                  R14 The actual results were as follows: Material issued to produce 100 units of product ‘Flurry’: Material F       450kg @ R3.20 Material L       650kg @ R2.80   Calculate the following material variances: Price variance Mix variance

The standard composition of material that is used in the production of product ‘Flurry’ is as follows:   Material.               Cost per kg       Total cost Material F               R3/kg                  R12 Material L               R2/kg                  R14 The actual results were as follows: Material issued to produce 100 units of product ‘Flurry’: Material F       450kg @ R3.20 Material L       650kg @ R2.80   Calculate the following material variances: Price variance Mix variance

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The standard composition of material that is used in the production of product ‘Flurry’ is as follows:

 


Material.               Cost per kg       Total cost

Material F               R3/kg                  R12

Material L               R2/kg                  R14

The actual results were as follows:
Material issued to produce 100 units of product ‘Flurry’:


Material F       450kg @ R3.20

Material L       650kg @ R2.80

 

Calculate the following material variances:
Price variance
Mix variance

 

Expert Solution
Step 1

Standard costing means where standard is set for various cost element and actual cost is then compared with standard and deviations are calculated.

 

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