When the actual amount spent exceeds the standard amount that should have been spent, the material spending variance is .
Question
When the actual amount spent exceeds the standard amount that should have been spent, the material spending variance is .
Solution
When the actual amount spent is more than the standard amount that should have been spent, the material spending variance is unfavorable.
Here's the step-by-step explanation:
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Material spending variance is a measure used in management accounting to capture the difference between the actual cost of direct material and its standard cost.
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A standard cost is the budgeted or planned cost of producing specific products or performing specific services.
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If the actual cost is higher than the standard cost, it means the company has spent more than planned. This is considered unfavorable because it indicates inefficiency or increased costs.
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Therefore, when the actual amount spent exceeds the standard amount that should have been spent, the material spending variance is unfavorable.
Similar Questions
If actual raw materials cost exceeds the budgeted raw materials cost, then the variance is a(n) (favorable/unfavorable) variance.
Fill in the Blank QuestionFill in the blank question.When compared to the budgeted amount, if the actual cost or revenue contributes to a higher income, then the variance is considered .
Spending variances are computed by taking actual results minus the Blank______ budget.
A raw materials budget variance is further analyzed into a raw materials (price/rate/spending) variance and a raw materials (usage/efficiency) variance.
The difference between the actual amount of materials used in production and the standard amount of materials allowed for the actual output, multiplied by the standard price per unit of materials is the materials variance.
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