Please answer the question attached Question 1) Question 2) The standard cost of
ID: 2486129 • Letter: P
Question
Please answer the question attached
Question 1)
Question 2)
The standard cost of Product B manufactured by MIT Company includes 2.10 units of direct materials at $6.70 per unit. During June, 27,000 units of direct materials are purchased at a cost of $6.50 per unit, and 27,000 units of direct materials are used to produce 12,700 units of Product B (a) Compute the total materials variance and the price and quantity variances. Total materials variance s Materials price variance$ Materials quantity variances (b) Compute the total materials variance and the price and quantity variances, assuming the purchase price is $6.77 and the quantity purchased and used is 26,900 units. Total materials variance$ Materials price variance Materials quantity varianceExplanation / Answer
SQ/unit = 2.1
SP = 6.7
AQ = 27,000
AP = 6.5
Actual units of products = 12,700
SQ = 2.1*12,700 = 26,670
= (AP*AQ) – (SP*SQ
= (6.5*27,000) – (6.7*26,670)
= -3189
Price Variance = (AP-SP)*AQ
= (6.5-6.7)*27,000
= -5,400(F)
Quantity Variance = (AQ-SQ)*SP
= (27,000-26,670)*6.7
= 2,211(U)
AQ=26,900
Total Variance = (6.77*26,900) – (6.7*26,670)
= 3,424
= 3,424 (U)
Price Variance = (AP-SP)*AQ
= (6.77-6.7)*26,900
= 1,883
= 1,883 (U)
Quantity Variance = (AQ-SQ)*SP
= (26,900-26,670)*6.7
= 1,541
= 1,541 (U)