Question

# Ruby Company produces a chair for which the standard specifies 6 yards of material per unit....

Ruby Company produces a chair for which the standard specifies 6 yards of material per unit. The standard price of one yard of material is \$13.60. During the month, 7,700 chairs were manufactured, using 45,300 yards at a cost of \$12.92 per yard.

Determine the following: Enter favorable variances as negative numbers.

 a. Direct materials price variance \$ b. Direct materials quantity variance \$ c. Total direct materials cost variance \$

a. Direct Materials price variance = (Actual quantity * Actual price) - (Actual quantity * Standard price)

= (45,300 * \$12.92) - (45,300 * \$13.6)

= \$30,804 Favorable

b. Direct Materials quantity variance = (Actual quantity * Standard price) - (Standard quantity * Standard price)

= (45,300 * \$13.6) - (7,700 * 6 * \$13.6)

= \$12,240 Favorable

c. Total direct materials cost variance = Direct Materials price variance + Direct Materials quantity variance

= \$30,804 Favorable + \$12,240 Favorable

= \$43,044 Favorable

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