Question

Required information Use the following information for the Exercises below. [The following information applies to the questions displayed below.] Hart Company made 4,600 bookshelves using 31,000 board feet of wood costing $359,600. The company's direct materials standards for one bookshelf are 7 board feet of wood at $11.50 per board foot. Exercise 21-13 Computation and interpretation of materials variances LO P2 (1) Compute the direct materials price and quantity variances incurred in manufacturing these bookshelves. AQ = Actual Quantity SQ = Standard Quantity AP = Actual Price SP = Standard Price Actual Cost Standard Cost

Answer 1

								Actual output =		4,600 Bookshelves
Actual Cost				Standard Cost				Standard Cost for Actual Output
Actual Quantity	AP	Actual Cost		Standard Qunatity	SP	Standard Cost		Standard Qunatity	SP	Standard Cost
31000	$             11.60	$               3,59,600		7	$ 11.50	$                     80.50		32200	$ 11.50	$               3,70,300
Ft				Ft				(4,600 X 7 Ft)
SOLUTION : 1
Direct Material price Variance = (		Actual Price	-	Standard Price	) "X"	Actual Quantity
Direct Material price Variance = (		$                     11.60	-	$                      11.50	) "X"	31000
Direct Material price Variance =		$                        0.10	"X"	31000
Direct Material price Variance =		$                     3,100	Unfavorable
SOLUTION : 2
Material Quantity Variance = (		Actual Quantity	-	Standard Quantity	) "X"	Standard Cost per unit
Material Quantity Variance = (		31,000	-	32,200	) "X"	$                     11.50
Material Quantity Variance =		1,200	"X"	$                      11.50
Material Quantity Variance =		$                   13,800	Favourable