Question 1

A biofuel refinery has a standard material requirement of 10 liters of raw algae per gallon of biofuel produced, at a standard cost of $2 per liter.
During the month, the refinery produced 5,000 gallons of biofuel and actually used 52,000 liters of raw algae.

Calculate the Material Usage Variance. (Enter as a positive number followed by A for Adverse or F for Favorable, e.g., 4000A or 4000F)

Accepted Answer

Calculate Standard Quantity for actual production. Compare to Actual Quantity used. Multiply the difference by the Standard Price.

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Multiplying by the actual price instead of the standard price, or getting the A/F direction wrong.

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA MA — Management Accounting Practice Exam 1

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