Cost Management: A Strategic Emphasis 5th Edition by David Stout, Edward Blocher, Gary Cokins

Exercise 30

Refer to Exhibit 14.8 and the accompanying discussion in the text. Demonstrate that the materials usage variance for PVC during 2010 was $2,400F.

Step 1 of 2

Material usage variance is the difference between the actual material usage at the budgeted price and the planned or budgeted material usage in production. F signifies that the result is favorable and U signifies that result is unfavorable.