Question
A company sets a standard cost of ₹50 per unit. Actual
cost was ₹55 per unit for 1,000 units. The material price variance was ₹3,000 (A) and usage variance ₹2,000 (A). What is the total material cost variance?Solution
Total Material Cost Variance = Price Variance + Usage Variance = ₹3,000 (A) + ₹2,000 (A) = ₹5,000 (A).
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