Part B (30 Points) The following standards have been established for a raw mater

Question

Part B (30 Points) The following standards have been established for a raw material used to make product 084: Standard quantity of the material per unit of output 7.10 meters S 18.30 per meter The following data pertain to actual operations concerning the product for the last month 3,400 meters Actual material purchased Actual cost of material purchased Actual material used in production Actual output S 64,090 3,400 meters 500 units of product 084 Required: 3. Using the template provided below, calculate the materials price variance, materials quantity variance and spending variance for the month? Make sure to identify the variances as favorable (F) or unfavorable Actual Quantity of Input, at Actual Price Actual Quantity of Input, at Standard Price Standard Quantity Allowed for Output, at Standard Price (AQ x AP) (AQ × SP) Materials price variance, Materials quantity variance, Spending Variance, 4. What does the above variance analysis tell us about the performance of the: a) Purchasing manager: b) Production manager

Explanation / Answer

Actual quanity 3400 Actual price 18.85 Material price variance Total actual cost 64090 (64090-62220) 1870 Actual quanity 3400 Unfavorable Spending variance Standard price 18.3 Material quanity variance (64965-64090) Actual quanity at standard price 62220 (64965-62220) 875 2745 Favorable Standard quanity (500*7.10) 3550 Favorable Standard price 18.3 Total standard cost 64965

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