Question

Reelmates manufactures fishing poles. In a recent month, the company budgeted production of 2,000 poles. Actual production was 2,200. According to the standard cost card, each pole requires 3 feet of fiberglass rod at a cost of $9 per foot. Reelmates used 6,500 feet of rod at a net cost of $65,000 for the period.

The total material variance was:

Multiple Choice

• $5,600 unfavorable.

• $6,500 favorable.

• $900 unfavorable.

• $900 favorable.

Answer 1

Total material variance: A. В C 1 Actual production 2 Standard quantity per unit (feet) 3 Standard quantity (feet) 4 Standard price per foot 5 Actual quantity 6 Actual materials cost 7 Actual price per foot 2,200 3 6,600 $9 6,500 $65,000 $10 8 Total material variance (Actual quantity X Actual price) - (Standard quantity x 9 Standard price) $5,600 Unfavorable 10 11 Thus, the correct option is '$5,600 unfavorable' Calculations are shown below А 1 Actual production 2 Standard quantity per unit (feet) 3 Standard quantity (feet) 4 Standard price per foot 5 Actual quantity 2200 B1*B2 9 6500 65000 |-В6B5 Actual materials cost 6 7 Actual price per foot Total material variance (Actual quantity X Actual price) - (Standard 9 quantity x Standard price) -(B5 B7)-(B3 B4) Unfavorable 10 11 Thus, the correct option is '$5,600 unfavorable'