Tag: Variance Analysis

Budgeted and actual results are as follows:

• materials (kgs per unit) budgeted 24 AND actual 26
• materials (price per kg) budgeted £12 AND actual £16
• labour (hours per unit) budgeted 8 AND actual 6
• labour (rate per hour) budgeted £25 AND actual £22

What is the total variance per unit manufactured?

Select ONE answer:

1. £60 adverse
2. £72 adverse
3. £86 adverse
4. £120 adverse

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct – (24 * £12 + 8 * £25) – (26 * £16 + 6 * £22)
2. Not correct
3. Not correct
4. Not correct

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