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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
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How much to order Supposing the estimated annual usage of a component by Machinery Ltd is 20,000 units. Usage is even throughout the year and only one order per annum is place
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