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Acme Manufacturing uses standard costing. Using the following data, calculate the Material Cost Variance. Std Materials...

Acme Manufacturing uses standard costing. Using the following data, calculate the Material Cost Variance. Std Materials 5 sheets at $6.20 31 Std Direct Labor 2 hrs at $10 20 Std Mfg Ovrhd 2 direct labor hrs at $5 10 Total Standard Cost per unit 60 Actual Material Price 5 sheets at $5.90 29.5 Actual Sheets Used 60000 This problem is a variation of the problem on page 204 chapter 24 Remember that when analyzing variances a negative result can be favorable in some cases and unfavorable in others and the same goes for positive results. You have to use some common sense.

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Answer #1
Qty Rate Amt
Standard 5.00 6.20 31.00
Qty Rate Amt
Actual 5.00 5.90 29.50
Actual Usage of Material 60000
Units Produced 12000 (60000/5)
Qty Rate Amt
Standard Cost for Actuals 60000 6.20 3,72,000
Qty Rate Amt
Actual Cost for Actuals 60000 5.90 3,54,000
Direct Material Variance:
(Standard Cost-Actual Costs)
(372000-354000)
18000 Favourable
Direct Material Price Variance:
(S.Price-Actual Price)*Actual Usgae
(6.20-5.90)*60000
18000 Favourable
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