Bronze Brick Company uses the following rule to determine whether materials usage variances should be investigated:
A materials usage variance will be investigated when the variance is greater than either $5,000 or 12% of the standard cost.
During May,the company purchased and used 11,000 kg of concrete for $5 per kilogram.It was able to make 20,000 bricks.Its standard quantity of materials allowed is 0.50 kg of concrete per brick at a standard price of $6.50 per kilogram. A. Determine Bronze's material usage variance and whether it is favourable or unfavourable.
B. Should the variance be investigated?

Question

Quizplus · Accepted Answer

The Answer of Bronze Brick Company uses the following rule to determine whether materials usage variances should be investigated:
A materials usage variance will be investigated when the variance is greater than either $5,000 or 12% of the standard cost.
During May,the company purchased and used 11,000 kg of concrete for $5 per kilogram.It was able to make 20,000 bricks.Its standard quantity of materials allowed is 0.50 kg of concrete per brick at a standard price of $6.50 per kilogram. A. Determine Bronze's material usage variance and whether it is favourable or unfavourable.
B. Should the variance be investigated?

Bronze Brick Company Uses the Following Rule to Determine Whether