Question

Direct Materials Variances Silicone Engine Inc. produces wrist-worn tablet computers. The company uses Thin Film Crystal (TFC) LCD displays for its products. Each tablet uses one display. The company produced 650 tablets during December. However, due to LCD defects, the company actually used 500 LCD displays during December. Each display has a standard cost of $6.20. LCD displays were purchased for December production at a cost of $3,150. Determine the price variance, quantity variance, and total direct materials cost variance for December. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. And, enter your final variance amounts to the nearest whole dollar. Price variance $ Quantity variance 0 Total direct materials cost variance 0

Answer 1

SP 6.2 Per pound 650 Display 650 Units 500 Display 500 Units 6.3 Per pound AQP Data Standard Price Standard Quantity for Actual Output (650*1) Actual Output Actual Quantity Purchased Actual Quanity Used Actual Price of Material (3150/500) Answers Price Variance (SP-AP)* AQ purchased = (6.30-6.20)*500 Quantity Variance (SQ-AQ)*SP=(650-500)*6.20 Total Cost Variance = (500*6.3)-(6.20*650) ΑΟ AP -50 Favorable -930 Favorable -880 Favorable