Exercise 6-13 The following information is available for Bonita\'s Chocolates: A

Question

Exercise 6-13 The following information is available for Bonita's Chocolates: Actual production 2,950 boxes Budgeted production 3,450 boxes Direct Materials Standard Actual 1.5 pounds of chocolate per box$8.01 per pound 6,400 pounds purchased$7.75 per pound 5,055 pounds used $7.75 per pound (a) Calculate the direct materials price and quantity variances. (Round answers to O decimal places, e.g. 125. If variance is zero, select "Not Applicable" and enter 0 for the amounts.) Direct material price variance Direct material quantity variance Click if you would like to Show Work for this question: Open Show Work

Explanation / Answer

For calculating material variances, we would need:

1. Standard Qty = Standard Consumption x Actual Production = 1.5*2950 = 4,425

2. Standard Rate = 8.01 (given)

3. Actual Qty consumed = 5,055 (quantity which is consumed and not which is purchased)

4. Actual Price = 7.75 (given)

Direct material price variance = (Actual rate - Standard rate)* Actual quantity consumed

= (7.75 - 8.01)* 5055

= -1,314 (rounded off)

Direct material quantity variance = (Actual quantity - Standard quantity) * Standard Rate

= (5055 - 4425) * 8.01

= 5,046 (rounded off)

therefore, positive price variance of $1,314 and adverse quantity variance of $5,046.

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