ICAEW BIP · Chapter 7 · Question 6 of 10
Each unit of product F contains 4 kg of material after processing. During processing, 20% of the material input is lost as wastage. Budgeted production is 6,000 units. What is the budgeted material usage?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) 30,000 kg
Explanation
Because wastage is 20% of input, the 4 kg in each finished unit is 80% of the input. Input per unit = 4 / 0.8 = 5 kg. Budgeted usage = 6,000 x 5 kg = 30,000 kg.
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