Mitcheil Products manufactures faux boulders to be used in various landscaping a

Question

Mitcheil Products manufactures faux boulders to be used in various landscaping applications. A special resin is used to make the boulders. The standard quantity of resin used for each boulder is 2 pounds. Mitchell Products uses a standard cost of $1.80 per pound for the resin. The company produced 11,000 boulders in June. In that month, 21,750 pounds of resin were purchased at a total cost of $43.500. A total of 21,500 pounds were used in producing the boulders in June. Read the requirements Requirement 1. Calculate the direct material price variance. Begin by determining the formula for the price variance, then compute the price variance for the direct materials.(Enter the variance as a positive number. Enter currency amounts in the formula to the nearest cent and then round the final variance amount to the nearest whole dollar. Label the variance as favorable (F) or unfavorable (U) Abbreviations used: DM Direct materials) mpts of oe Actual quanity purchiedicoStandand priceprice variance Actual quantity purchatod..] × ( x ( 1.80 1 of 1 Requirement 2. Caloulate the direct material quantity variance, Determine the formula for the quantity varianoe, then compute the quantity variance for the direct materials. (Enter the variance as a positive number Enter currency amounts in the formula to the nearest cent and then round the final variance amount to the nearest whole dollar Label the variance as favorable (F) or unfavorable of o ??) Standard quantity alowedDM quantity variance x(Actual quantity used x ( Standard price D of 21,75022000 1.80

Explanation / Answer

Hey there !!

In this question we are asked to find out Material Variances :

Direct Material Price variance and Direct Material usage variance. I'll help you understand how to calculate these variances :)

Now, let us first list down all the details we have and find the missing ones !

Look at the table below :

Now, Direct Material Price variance can be calculated by applying following formula :

= 4300 (U)

I hope the solution is clear to you now...do let me know if you have any doubts...happy to help :)

All the best :)

Particulars Remarks Standard Quantity per unit of Output 2 pounds (Given in the Question) Standard Cost per pound of Resin $ 1.8 (Given in the Question) Actual Resins purchased (in pounds) 21750 (Given in the Question) Cost of Purchase $ 43,500 (Given in the Question) Actual cost per pound = 43500/ 21,750 = $ 2 Actual Qty used in production (in pounds)                   21,500 (Given in the Question)

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