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What Is The Importance Of Direct Material Variance?
This topic is vital for accounts students. If you want to understand it in a better way then you must avail Direct Material Variance Assignment Help. Your marks will also get better because once you have understood the topic well then you won’t face any problem in solving the questions. Let us see the importance this topic holds-
- Direct material variance tells about the difference between standard cost related to the materials required in the production and the costs which are actually incurred.
- It is further classified as purchase price variance and material yield variance.
- Purchase price variance calculates the difference between the standard cost per unit and the actual cost incurred per unit in relation to direct materials that are purchased. Then it needs to be multiplied with standard units related to production process. This work is generally handled by purchasing department in a company.
- Next is material yield variance that shows the difference between standard units and actual units related to the process of production. And the answer is then multiplied by the per unit standard cost. This work is handled by the production department.
- These variances help a lot to the management and they can sort out the issues faced by purchase department and the manufacturing department.
- Generally the students will notice that direct material variance will be charged with respect to cost of goods sold for that period in which it is incurred.
- This topic can be a little complex to understand and it involves a lot of numerical questions, therefore opting for professional help is the best choice for students.
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