Question

Medium speed bump 17 $ 1.00 Direct materials information Standard pounds per unit.................. Standard price per pound ............ Actual quantity purchased and used per unit... Actual price paid for material per pound....... Direct materials price variance. Direct materials quantity variance. ........... Total direct material variance Number of units produced......... Large speed bump ? $ 1.30 17 1.80 $ 3,400 U $ 1.50 $ 1,500 u $ 400 F $ 1,840 U 400

Find the question marks

Answer 1

SOLUTION

Medium speed bump

1. Actual quantity purchase and used per unit

Material price variance = Actual quantity * (Standard price per pound - Actual price per pound)

1,500 U = Actual quantity * ($1.00 - $1.50)

Actual quantity purchase and used = 1,500 / 0.5 = 3,000

Actual quantity purchase and used per unit = 3,000 / 200 = $15

2. Total direct material price variance = Direct material price variance + Direct material quantity variance

= 1,500 U + 400 F

= 1,100 U

Large speed bump

1. Total direct material price variance = Direct material price variance + Direct material quantity variance

1,840 U = 3,400 U + Direct material quantity variance

Direct material quantity variance = 1,840 - 3,400

= 1,560 F

2. Actual quantity consumed = 400 * 17 = 6,800

Material Quantity variance= Standard price (Standard quantity- Actual quantity)

1,560 F = 1.30 * (Standard quantity- 6,800)

Standard quantity = 8,000

Standard quantity per unit = 8,000 / 400 = 20