The direct materials purchases variance is computed when the materials are purch
ID: 2597024 • Letter: T
Question
The direct materials purchases variance is computed when the materials are purchased.
1. What is the materials price variance for the month? (Input the amount as a positive value. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.) Materials price variance _____________
2. What is the materials quantity variance for the month? (Input the amount a as positive value. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.)
Materials quantity variance ___________
The following materials standards have been established for a particular product:Explanation / Answer
SOLUTION
(A) Material Price variance = (Actual quantity * Actual price ) - (Actual quantity * Standard price)
= $34,155 (2,700 pounds * $13 per pound)
= $34,155 $35,100
= $945 F
(B) Standard quantity = 500 units * 3.8 pounds per unit = 1,900 pounds
Materials quantity variance = (Actual quantity - Standard quantity) * Standard price
= (2,000 pounds - 1,900 pounds)* $13 per pound
= (100 pounds) * $13 per pound = $1,300 U