Question

A company produces a single product called a widget and provides the following information for the...

A company produces a single product called a widget and provides the following information for the month of May about one of the materials used to make the product:

  • Pounds of material purchased: 9,800
  • Pounds of material used: 8,700
  • Total cost of material purchased: $20,384
  • Standard material cost: $2.11/pound
  • Standard material quantity: 6 pounds per widget
  • Number of widgets produced: 1600

What is the materials price variance?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Actual quantity of material used = 8,700 pounds

Actual quantity of material purchased = 9,800 pounds

Actual cost of material purchased = $20,384

Hence, actual price of material = Actual cost of material purchased/Actual quantity of material purchased
= 20,384/9,800
= $2.08 per pound

Standard price = $2.11 per pound

Standard quantity = 6 pounds per widget

Actual output = 1,600 widgets

Hence, standard quantity for actual output = 1,600 x 6
= 9,600 pounds


Direct material price variance = Actual quantity x (Standard price - Actual price)
= 8,700 x (2.11 – 2.08)
= $261 (Favorable)

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Al-Shabad Company produces a single product. The company has set the following standards for material and...
Al-Shabad Company produces a single product. The company has set the following standards for material and labor. Standard quantity/hours per unit standard price/rate direct materials 7 pounds per unit $7 per pound direct labor 3 hours per unit $10 per hour During the past month the company purchased 7,000 pounds of direct materials at a cost of $17,500. All of this material was used in production of 1,300 units of product. Direct labor totaled $36,750 for the month. The following...
Milton  Company uses a standard cost system.   -Standards call for 2 direct labor hours per widget.  The standard...
Milton  Company uses a standard cost system.   -Standards call for 2 direct labor hours per widget.  The standard labor rate is $10 per hour. -Four pounds of material are needed for each widget at a standard cost of $2.25 per pound.   Milton based the static budget for the year on 15,000 widgets.  Milton actually produces 17,000 widgets during the year. -Direct labor costs are $359,100 for 34,200 hours. - Milton purchased and used 70,000 pounds of materials at $2.50 per pound. 1. For...
Nancy Drew Manufacturing produces a single product and has prepared the following standard cost sheet for...
Nancy Drew Manufacturing produces a single product and has prepared the following standard cost sheet for one unit of the product: Direct materials (8 pounds at 2.00 per pound) 16.00 Direct Labour (5 hours at 13 per hour) 65 During the month of April, the company manufactures 240 units and incurs the following actual costs: Direct materials purchased and used (2000 pounds) 4420 Direct Labour (1220 hours) 15677 Instuctions : Compute and round to dollars and cents the following (indicate...
Puvo, Inc., manufactures a single product in which variable manufacturing overhead is assigned on the basis...
Puvo, Inc., manufactures a single product in which variable manufacturing overhead is assigned on the basis of standard direct labor-hours. The company uses a standard cost system and has established the following standards for one unit of product: Standard Quantity Standard Price or Rate Standard Cost Direct materials 1.5 pounds $ 4.50 per pound $ 6.75 Direct labor 0.6 hours $ 12.00 per hour $ 7.20 Variable manufacturing overhead 0.6 hours $ 2.75 per hour $ 1.65 During March, the...
The following standards have been established for a raw material used to make product I92:         ...
The following standards have been established for a raw material used to make product I92:          Standard quantity of the material per unit of output................................................ 6 pounds Standard price of the material.................. $2.25 per pound Standard hours of labor per unit of output 3 hours Standard rate of the labor per hour $8 per hour The following data pertain to a recent month’s operations: Actual material purchased...................... 13,600 pounds Actual cost of material purchased.......... $31,620 Actual material used in production...........
Your Company manufactures a single product. The company uses a standard cost system and has established...
Your Company manufactures a single product. The company uses a standard cost system and has established the following standards for one unit of product: Standard Standard Price Standard Quantity or Rate Cost per Unit Direct materials............................. 1.5 pounds $3.00 per pound $4.50 Direct labor.................................... 0.6 hours $6.00 per hour $3.60 Variable manufacturing overhead. 0.6 hours $1.25 per hour $0.75 During March, the following activity was recorded by the company: The company produced 3,000 units during the month. A total of...
Q1 Doctor Bombay Manufacturing produces a single product and has prepared the following standard cost sheet...
Q1 Doctor Bombay Manufacturing produces a single product and has prepared the following standard cost sheet for one unit. Direct Materials (8 pounds at $2.50 per pound) Direct Labor ( 2.5 hours at $14 per hour) During the month of March 2018 275 units of the product were manufactured at the following costs were incurred: Direct Materials purchased and used 2,500 pounds The total cost was $5,850 Direct Labor Required 703 hours    The total cost was $9,673 (rounded) Based on...
Bellingham Company produces a product that requires nine standard pounds per unit. The standard price is...
Bellingham Company produces a product that requires nine standard pounds per unit. The standard price is $6 per pound. If 6,000 units used 55,100 pounds, which were purchased at $5.82 per pound, what is the direct materials (a) price variance, (b) quantity variance, and (c) cost variance? Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. a. Direct materials price variance $ Favorable b. Direct materials quantity variance $...
The following standard direct material cost/unit have been established for product N90:            5 pounds of...
The following standard direct material cost/unit have been established for product N90:            5 pounds of direct material at $10 per pound During June 2,000 units of product N90 were made, and the quantity variance is favorable $2,000 and price variance is Unfavorable $9,800. All direct material purchased in June was used for producing the 2,000 units. How many pounds of direct material were actually used during June? Group of answer choices none of the other answers 9,800 pounds 10,000...
Direct Materials Variances Bellingham Company produces a product that requires five standard pounds per unit. The...
Direct Materials Variances Bellingham Company produces a product that requires five standard pounds per unit. The standard price is $6 per pound. If 6,400 units used 31,400 pounds, which were purchased at $6.24 per pound, what is the direct materials (a) price variance, (b) quantity variance, and (c) cost variance? Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. a. Direct materials price variance $ b. Direct materials quantity...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT