Question

The following materials standards have been established for a particular product:   Standard quantity per unit of...

The following materials standards have been established for a particular product:
  Standard quantity per unit of output 2.7   grams
  Standard price $14.00   per grams
The following data pertain to operations concerning the product for the last month:
  Actual materials purchased 1,500 grams
  Actual cost of materials purchased $ 17,475
  Actual materials used in production 1,400 grams
  Actual output 370 units
The direct materials purchases variance is computed when the materials are purchased.
Required:
a.

What is the materials price variance for the month? (Input the amount as a positive value. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.)

Materials price variance=

F or U=

b.

What is the materials quantity variance for the month? (Input the amount a as positive value. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.)

Materials quantity variance=

F or U=

      

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Homework Answers

Answer #1
Qty Rate Amt
Standard: 2.70 14.00 37.80
Actual Production 370
Standard Cost for Actual Production:
Qty Rate Amt
Standard: 999 14.00 13986
Qty Rate Amt Actual Cost of Purchase 17475
Actual Costs: 1400 11.65 16310 Actual Purchases Qty 1500
Rate PU 11.65
Material Price Variance:
(Standard Rate-Actual Rate)*Actual Purchases
(14-11.65)*1500
3525 Favourable
Material Quantity Variance:
(Standard Qty-Actual Qty Consumed)*Standard Price
(999-1400)*14
-5614 Unfavourable
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