Here, while calculating material cost variance why we’ve not taken 200*90% instead of 5200*182/180 for standard cost of actual o/t.
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Dear Deepanshi
Whenever we calculate cost variance be it labour or material or overheads, we always use standard cost for actual output less actual cost
To calculate standard cost for actual output the rhythm goes like, 180 kgs cost ₹ 5200 then for 182 actual quantity what will be the cost?
That’s why we used ₹ 5200×182/180
Standard cost for actual output simply means cost for actual quantity in standard terms.
Hope it helps.