Question 1

**Section A**

AeroForge manufactures titanium drone chassis. The standard material requirement is 5 kg of titanium alloy per chassis at a standard price of $12 per kg.

During the month, AeroForge produced 2,000 chassis. The actual amount of titanium alloy used was 10,400 kg.

Calculate the material usage variance in dollars. 
*(Enter the absolute numerical value only. Do not include a negative sign, dollar sign, or 'A'/'F')*

Accepted Answer

1. Calculate standard quantity for actual production: 2,000 chassis * 5 kg = 10,000 kg.
2. Compare to actual quantity used: 10,400 kg.
3. Difference in kg: 10,400 - 10,000 = 400 kg (Adverse).
4. Multiply by standard price: 400 kg * $12/kg.

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Multiplying the 400 kg difference by the actual price instead of the standard price.

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA MA — Management Accounting Practice Exam 6

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