Asked by Jenna Raney on May 17, 2024
Verified
The standards for product V28 call for 7.5 pounds of a raw material that costs $18.10 per pound. Last month, 1,400 pounds of the raw material were purchased for $24,990. The actual output of the month was 160 units of product V28. A total of 1,300 pounds of the raw material were used to produce this output.The direct materials purchases variance is computed when the materials are purchased.Required:a. What is the materials price variance for the month?b. What is the materials quantity variance for the month?
Materials Price Variance
The variance between the real expense of materials and their anticipated (standard) price.
Raw Material
The basic substances or components that are processed or used in the manufacturing of goods.
- Execute calculations on various variance forms, like materials' price and quantity deviations.
- Review both beneficial and harmful variances to understand their impact.
Verified Answer
AW
Asharia WoolardMay 20, 2024
Final Answer :
a.Materials price variance = (Actual quantity × Actual price) − (Actual quantity × Standard price)= $24,990 − (1,400 pounds × $18.10 per pound)= $24,990 − $25,340= $350 Favorableb.Standard Quantity = Standard quantity per unit × Actual output = 7.5 pounds per unit × 160 units = 1,200 poundsMaterials quantity variance = (Actual quantity − Standard quantity*) × Standard price= (1,300 pounds − 1,200 pounds) × $18.10 per pound= 100 pounds × $18.10 per pound= $1,810 Unfavorable
Learning Objectives
- Execute calculations on various variance forms, like materials' price and quantity deviations.
- Review both beneficial and harmful variances to understand their impact.
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