Question

Ruby Company produces a chair that requires 7 yards of material per unit. The standard price of one yard of material is $10.20. During the month, 7,300 chairs were manufactured, using 50,100 yards at a cost of $9.69 per yard. Determine the following: Enter favorable variances as negative numbers. a. Price Variance 25,551 b. Quantity Variance C. Cost Variance

Answer 1

The answer has been presented in the supporting sheet. For detailed answer refer to the supporting sheet.

Answer Part 1) Price variance = (actual Price - standard Price) * actual material = (9.69-10.2)*50100 = $ 25551 Favourable Part 2) Quantity variance = (actual qty - standard qty)*standard price = (50100-(7300*7))*10.2 = $ 10200 Favourable Part 3) Cost variance = actual cost - standard cost = (50100*9.69)-(7*7300*10.2) = 485469-521220 = $ 35751 Favourable Thus the final answer is Price Variance Quantity Variance Cost Variance 25551 Favourable 10200 Favourable 35751 Favourable