Question

Question 1

Simba Company’s standard materials cost per unit of output is $9.84 (2.40 pounds x $4.10). During July, the company purchases and uses 2,808 pounds of materials costing $14,882 in making 1,300 units of finished product.

Compute the total, price, and quantity materials variances. (Round per unit values to 2 decimal places, e.g. 52.75 and final answers to 0 decimal places, e.g. 52.)

Total materials variance:

Materials price variance:

Materials quantity variance:

Answer 1

Materials price variance = Actual Quantity x (Actual Price - Std.Price)

Materials price variance = 2808 x (5.30 - 4.10 ) = 2808 x 1.2 = 3369.60 ~3370 U

Actual Price = 14882 / 2808 = 5.299 or 5.30

Materials quantity variance = Std price x ( Actual Quantity - Standard Quantity)

Materials quantity variance:= 4.10 x ( 2808 - 3120 ) = $1279 F

Standard Quantity = 1300 x 2.40 = 3120

Total materials variance = Materials quantity variance + Materials price variance

Total materials variance = $1279F + 3370U = $2091U