Question

Bowie Sporting Goods manufactures sleeping bags. The manufacturing standards per sleeping bag, based on 5,000 sleeping bags per month, are as follows:

Direct material of 5.00 yards at $5.75 per yard

Direct labor of 2.50 hours at $19.00 per hour

Overhead applied per sleeping bag at $18.00

In the month of April, the company actually produced 4,900 sleeping bags using 24,100 yards of material at a cost of $5.90 per yard. The labor used was 11,500 hours at an average rate of $18.50 per hour. The actual overhead spending was $96,200.

Determine the materials price variance and round to the nearest whole dollar. Enter a favorable variance as a negative number. Enter an unfavorable variance as a positive number.

Answer 1

• Requirement asked by you

Material Price Variance = $ 3615 Unfavourable

Material Price Variance
(	Standard Rate	-	Actual Rate	)	x	Actual Quantity
(	$                               5.75	-	$                       5.90	)	x	24100
	-3615
	Variance		$              3,615.00			Unfavourable-U