Question

Table Manufacturing Company produces one style of tables.
the following data pertain to producing one table
Planned production/month	?
units (one table)	50
Piece of woods (M)	20
Estimated M price	$20
Actual production	?
Quantity purchased (QP) from M	19
Actual price (AP)	$21
Material price variance?	?

		$19, Favorable
		$19, Unfavorable
		$20, Favorable
		$20, Unfavorable

Given for XM Company the following data for January 20X1.
Direct material purchased and used in production accounted for	$100,000
Units purchased	10,000
The standard units	10,200
Managers estimate price variance not to exceed 2% of the (actual units X standard price) as unfavorable variance. The standard price should be

	1.	Greater than actual price paid for each unit
	2.	Smaller than actual price paid for each unit
	3.	The same as the actual price paid for each unit
	4.	More information is needed

Total direct Labor variance is

	a.	Efficiency variance + rate variance with respect to direct labor
	b.	Efficiency variance + rate variance with respect to all labor (direct and indirect)
	c.	Efficiency variance - rate variance with respect to direct labor
	d.	Efficiency variance - rate variance with respect to all labor (direct and indirect)

Answer 1

Material price variance = (Standard Price – Actual Price)*Actual Quantity

= (20-21)*19

= $19, Unfavorable

2.
Smaller than actual price paid for each unit

a.

Efficiency variance + rate variance with respect to direct labor