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Material usage variance
Difference among standard quantity of material and actual quantity used is the material usage variance. This variance arises due to:
Economic use of materials
Use of substitutes
Higher/less wastage of materials
Changes in designs or specification of product
full explaination with diagram
During 2010, Jackson Company estimated that its manufacturing employees would work 80,000 direct labor hours. During the year the company actually worked 75,000 direct labor hours.
Why might managers favour this ABC system instead of the older system that allocated all MOH costs on the basis of direct? labour?
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