{"id":48725,"date":"2024-04-15T22:45:25","date_gmt":"2024-04-15T22:45:25","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=48725"},"modified":"2024-04-15T22:45:25","modified_gmt":"2024-04-15T22:45:25","slug":"product-a-requires-10-kg-of-material-at-the-rate-of-rs-5-per-kg-the-actual-consumption-of-material-for-the-manufacturing-of-product-a-comes-to-12-kg-of-material-at-the-rate-of-rs-6-per-kg-direct-m","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/product-a-requires-10-kg-of-material-at-the-rate-of-rs-5-per-kg-the-actual-consumption-of-material-for-the-manufacturing-of-product-a-comes-to-12-kg-of-material-at-the-rate-of-rs-6-per-kg-direct-m\/","title":{"rendered":"Product A requires 10 kg of material at the rate of Rs. 5 per kg. The actual consumption of material for the manufacturing of product A comes to 12 kg of material at the rate of Rs. 6 per kg. Direct material cost variance is"},"content":{"rendered":"<p>[amp_mcq option1=&#8221;Rs. 22 (favourable)&#8221; option2=&#8221;Rs. 22 (unfavourable)&#8221; option3=&#8221;Rs. 12 (favourable)&#8221; option4=&#8221;Rs. 12 (unfavourable)&#8221; correct=&#8221;option4&#8243;]<!--more--><\/p>\n<p>The correct answer is: <strong>D. Rs. 12 (unfavourable)<\/strong><\/p>\n<p>The direct material cost variance is calculated as follows:<\/p>\n<p>Direct material cost variance = (Actual quantity used &#8211; Standard quantity allowed) x Standard price<\/p>\n<p>In this case, the actual quantity used is 12 kg, the standard quantity allowed is 10 kg, and the standard price is Rs. 5 per kg. Therefore, the direct material cost variance is:<\/p>\n<p>Direct material cost variance = (12 kg &#8211; 10 kg) x Rs. 5 per kg = Rs. 12 (unfavourable)<\/p>\n<p>This means that the company used 2 kg more material than it was supposed to, and the cost of this extra material is Rs. 12. This variance is unfavourable because it means that the company spent more money on materials than it was supposed to.<\/p>\n<p>The other options are incorrect because they do not take into account the actual and standard quantities used.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>[amp_mcq option1=&#8221;Rs. 22 (favourable)&#8221; option2=&#8221;Rs. 22 (unfavourable)&#8221; option3=&#8221;Rs. 12 (favourable)&#8221; option4=&#8221;Rs. 12 (unfavourable)&#8221; correct=&#8221;option4&#8243;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[952],"tags":[],"class_list":["post-48725","post","type-post","status-publish","format-standard","hentry","category-costing","no-featured-image-padding"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Product A requires 10 kg of material at the rate of Rs. 5 per kg. The actual consumption of material for the manufacturing of product A comes to 12 kg of material at the rate of Rs. 6 per kg. Direct material cost variance is<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/product-a-requires-10-kg-of-material-at-the-rate-of-rs-5-per-kg-the-actual-consumption-of-material-for-the-manufacturing-of-product-a-comes-to-12-kg-of-material-at-the-rate-of-rs-6-per-kg-direct-m\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Product A requires 10 kg of material at the rate of Rs. 5 per kg. The actual consumption of material for the manufacturing of product A comes to 12 kg of material at the rate of Rs. 6 per kg. Direct material cost variance is\" \/>\n<meta property=\"og:description\" content=\"[amp_mcq option1=&#8221;Rs. 22 (favourable)&#8221; option2=&#8221;Rs. 22 (unfavourable)&#8221; option3=&#8221;Rs. 12 (favourable)&#8221; option4=&#8221;Rs. 12 (unfavourable)&#8221; correct=&#8221;option4&#8243;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/exam.pscnotes.com\/mcq\/product-a-requires-10-kg-of-material-at-the-rate-of-rs-5-per-kg-the-actual-consumption-of-material-for-the-manufacturing-of-product-a-comes-to-12-kg-of-material-at-the-rate-of-rs-6-per-kg-direct-m\/\" \/>\n<meta property=\"og:site_name\" content=\"MCQ and Quiz for Exams\" \/>\n<meta property=\"article:published_time\" content=\"2024-04-15T22:45:25+00:00\" \/>\n<meta name=\"author\" content=\"rawan239\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"rawan239\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"1 minute\" \/>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"Product A requires 10 kg of material at the rate of Rs. 5 per kg. The actual consumption of material for the manufacturing of product A comes to 12 kg of material at the rate of Rs. 6 per kg. Direct material cost variance is","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/exam.pscnotes.com\/mcq\/product-a-requires-10-kg-of-material-at-the-rate-of-rs-5-per-kg-the-actual-consumption-of-material-for-the-manufacturing-of-product-a-comes-to-12-kg-of-material-at-the-rate-of-rs-6-per-kg-direct-m\/","og_locale":"en_US","og_type":"article","og_title":"Product A requires 10 kg of material at the rate of Rs. 5 per kg. The actual consumption of material for the manufacturing of product A comes to 12 kg of material at the rate of Rs. 6 per kg. Direct material cost variance is","og_description":"[amp_mcq option1=&#8221;Rs. 22 (favourable)&#8221; option2=&#8221;Rs. 22 (unfavourable)&#8221; option3=&#8221;Rs. 12 (favourable)&#8221; option4=&#8221;Rs. 12 (unfavourable)&#8221; correct=&#8221;option4&#8243;]","og_url":"https:\/\/exam.pscnotes.com\/mcq\/product-a-requires-10-kg-of-material-at-the-rate-of-rs-5-per-kg-the-actual-consumption-of-material-for-the-manufacturing-of-product-a-comes-to-12-kg-of-material-at-the-rate-of-rs-6-per-kg-direct-m\/","og_site_name":"MCQ and Quiz for Exams","article_published_time":"2024-04-15T22:45:25+00:00","author":"rawan239","twitter_card":"summary_large_image","twitter_misc":{"Written by":"rawan239","Est. reading time":"1 minute"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/exam.pscnotes.com\/mcq\/product-a-requires-10-kg-of-material-at-the-rate-of-rs-5-per-kg-the-actual-consumption-of-material-for-the-manufacturing-of-product-a-comes-to-12-kg-of-material-at-the-rate-of-rs-6-per-kg-direct-m\/","url":"https:\/\/exam.pscnotes.com\/mcq\/product-a-requires-10-kg-of-material-at-the-rate-of-rs-5-per-kg-the-actual-consumption-of-material-for-the-manufacturing-of-product-a-comes-to-12-kg-of-material-at-the-rate-of-rs-6-per-kg-direct-m\/","name":"Product A requires 10 kg of material at the rate of Rs. 5 per kg. 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