Question 16.TQ.4 : You are presented with the following information for X Limit...

Accounting for Non-Accounting Students

You are presented with the following information for X Limited:

Standard price per unit: £10.
Standard quantity for actual production: 5 units.
Actual price per unit: £12.
Actual quantity: 6 units.

Required:
Calculate the following variances:

(a) direct material total variance
(b) direct material price variance
(c) direct material usage variance

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Variances for X Limited:

(a) Direct material total variance:	£
Actual price per unit × actual quantity = £12 × 6 units	72
Less: Standard price per unit × standard quantity for actual production = £10 × 5 units	50	(A)
	22
(b) Direct material price variance:
(Actual price – standard price) × actual quantity = (£12 – 10) × 6 units	£12	(A)
(c) Direct material usage variance:
(Actual quantity – standard quantity) × standard price = (6 – 5 units) × £10	£10	(A)

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