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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
Advantages of Value Added Statements 1) Managers might be in a better position to control their organizations own inputs than the cost and usage efficiency of purchased materia
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Illustration: ABC analysis Combine items on the basis of their relative value to form three categories—A, B and C. The data in the table below illustrates the ABC analysis.
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