The Standard Cost Card for a Batch of 3,000 Bottles

question 1

Multiple Choice

The Standard Cost Card for a batch of 3,000 bottles of shampoo includes the following:
1,500 litres of liquid S at £0.30 per litre
1) 5kg of powder P at £1.20 per kg
A batch of 3,000 bottles had the following usage:
1,700 litres of liquid S which cost £476 and 1.2kg of powder which cost £1.80
What are the material price and usage variances for the liquid?

• A) The Usage Variance is £30 Favourable and the Price Variance is £56 Adverse
• B) The Usage Variance is £56 Adverse and the Price Variance is £30 Favourable
• C) The Usage Variance is £60 Adverse and the Price Variance is £34 Favourable
• D) The Usage Variance is £34 Adverse and the Price Variance is £60 Favourable

---

Definitions:

Social Entities

Refer to groups or organizations that are focused on social objectives and activities, rather than profit-making.

Authority

The right or power assigned to an individual or organization to make decisions, command resources, or enforce rules within a specific context.

Open System

A concept in organizations and their management indicating that an organization interacts with its environment through the exchange of information, energy, or resources.

Inputs and Outputs

Refers to the materials, information, or people that enter a system (inputs) and the results or products that come out of it (outputs).