PP Ltd operates a standard absorption costing system. The following information has beenextracted from the standard cost card for one of its products:Budgeted production 1500 unitsDirect material cost: 7 kg × £4.10 £28.70 per unitActual results for the period were as follows:Production 1600 unitsDirect material (purchased and used): 12 000 kg £52 200It has subsequently been noted that due to a change in economic conditions the best price that the material could have been purchased for was £4.50 per kg during the period.Required1 Calculate the material price planning variance.2 Calculate the operational material usage variance.




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