Question

please answer these questions.

6. In producing 12,400 units of product last period, Fern LTD. used S53,940 pounds of Material B, costing $210,366. The company has established the standard of using 4.3 pounds of Material B per unit of product, at a price of $4.00 per pound Calculate the price, quantity, and total materials variances and indicate if they are favorable or unfavorable. Variance amount F or U Price variance aubisteluale Quantity variance Total materials variance hubniasxa baol toubong isdrio eno to hoitoubotg bstimi noibastnl A amit ovoM 7. Goat Products has the following information about the use of labor in producing their product Little Kid. Actual costs &quantities: Direct labor cost incurred $1,100,000 besl lStandard costs & quantities: Direct labor rate/hr nobl $21.50 a9 Hours to produce 1 unit amid slayo 1.3 50,000 Direct labor hours used 40,000 Units produced Calculate the rate, time, and total labor variances and indicate if they are favorable or unfavorable. F or U Variance amount Rate variance Time variance Total labor variance

Answer 1

Answer to Question 6:

Note 1: Analysis of Data

Standard: 1 Unit of Finished Goods – 4.3 Pounds of material B @ $ 4.00 per Pound

Actual: 12400 Units of Finished Goods- 53940 Pounds of Material @ $ 3.9 per Pound

Note 2 : Material cost card

Standard Cost for Actual Output			Actual cost
Qty	Rate	Amount	Qty	Rate	Amount
12400*4.3
53320	4	213280	53940	3.9	210366

Solution

1. Material Cost Variance: Standard cost for Actual Output- Actual Cost

                                                213280-210366 = 2914 F

2. Material Usage Variance: (Standard Qty- Actual Qty)*Standard Price

                                                (53320-53940)*4 = 2480 A

3. Material Price Variance: (Standard Price- Actual Price)*Actual Qty

                                                (4-3.9)*53940 = 5394 F

Where F = Favourable

             A = Adevrse

Also (a)=(b)+(c)