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Apple Ltd. produces product A. The company uses standard costing. To produce a unit of product A, 8 kg of raw material are required, the
Apple Ltd. produces product A. The company uses standard costing.
To produce a unit of product A, 8 kg of raw material are required, the standard cost of which is NIS 10 per kg, and 3 hours of direct labor, which costs NIS 50 per hour.
Indirect costs are charged on the basis of direct labor hours. In March 2015, the company planned to produce 12,000 units of product A.
In practice, the company produced 10,000 units in March.
The production of these units required 75,000 kg of raw material whose cost amounted to NIS 787,500 and 32,000 direct labor hours whose cost was NIS 1,664,000.
What is the material quantity deviation?
30000 for good
There is no correct answer
45000 negative
50000 for good
120000 negative
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