In a factory, the production of toys increased from 40,000 to 48,000 in 2 years, what is the rate of growth per annum.
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Total Material Cost Variance:
= Material Price Variance + Material Usage Variance
= 6,000 (FAV) + 3,000 (Adv) = ` 3,000 (FAV)
Actual Material Cost = 2,000 x 12= ` 24,000
Hence, the standard material cost of Actual production: = 24,000+3,000 (F) = ` 27,000
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