Bronze Brick Company Uses the Following Rule to Determine Whether

Essay

Bronze Brick Company uses the following rule to determine whether materials usage variances should be investigated:
A materials usage variance will be investigated when the variance is greater than either $5,000 or 12% of the standard cost.
During May,the company purchased and used 11,000 kg of concrete for $5 per kilogram.It was able to make 20,000 bricks.Its standard quantity of materials allowed is 0.50 kg of concrete per brick at a standard price of $6.50 per kilogram.
A. Determine Bronze's material usage variance and whether it is favourable or unfavourable.
B. Should the vari ance be investigated?