Question

Question 19 1 pts Acme Manufacturing uses standard costing. Using the following data, calculate the Material Cost Variance. 29.5 20 Std Materials 5 sheets at $5.90 Std Direct Labor 2 hrs at $10 Std Mfg Ovrhd 2 direct labor hrs at $5 Total Standard Cost per unit Actual Material Price 5 sheets at $6.20 Actual Sheets Used 31 60000 This problem is a variation of the problem on page 204 chapter 24 Remember that when analyzing variances a negative result can be favorable in some cases and unfavorable in others and the same goes for positive results. You have to use some common sense. -1.50 unfavorable 1.50 favorable 18,000 favorable -18,000 favorable 18,000 unfavorable -0.30 favorable 0.30 unfavorable

Answer 1

Sol: Malenial Cost variance = (standard. cost for Actueleutput - Actual cant) standard cost for 60,ood sheets = ( 60000 x $29.5) = $3.54.000 Actual cost for 60,000 Sheets = (60000 X $31) = $372.000 Material cost Ventance = ($354,000 - $3.52.000) = $ 15,000 UM DEVDUTERDI Hence Material Cost Vasiance = $ 18000 unfavourable 0