Question

The standard cost of Product B manufactured by Windsor Company includes 2.2 units of direct materials at $6.10 per unit. During June, 27,200 units of direct materials are purchased at a cost of $5.90 per unit, and 27,200 units of direct materials are used to produce 12,200 units of Product B. (a) Compute the total materials variance and the price and quantity variances. Total materials variance $ Materials price variance $ Materials quantity variance $ (b) Compute the total materials variance and the price and quantity variances, assuming the purchase price is $6.20 and the quantity purchased and used is 26,800 units. Total materials variance $ Materials price variance Materials quantity variance $

Answer 1

Answer:

(a).

Total Material Variance

= Standard Cost of Production - Actual Cost of Production

= 12200*2.2*6.10- 27200*5.90

= 163,724 - 160,480

= $3244 Favorable

Material Price Variance

= Standard price of Actual quantity used - Actual price of Actual quantity used

= 6.10*27200 - 5.90 *27200

= 165,920 - 160,480

= $ 5,440 Favorable

Material Quantity Variance

= Standard quantiy of Material for Actual Production at Standard price - Actual quantiy of Material for Actual at Standard price Production

= 12200*2.2*6.10 - 27200*6.10

= 163,724 - 165,920

=$2196 Unfavorable

(b).

Total Material Variance

= Standard Cost of Production - Actual Cost of Production

= 12200*2.2*6.10- 26800*6.20

=163,724 - 166,160

=$2436 Uufavorable

Material Price Variance

= Standard price of Actual quantity used - Actual price of Actual quantity used

=26800*6.10 - 26800*6.20

=$2680 Unfavorable

Material Quantity Variance

= Standard quantiy of Material for Actual Production at Standard price - Actual quantiy of Material for Actual at Standard price Production

=12200*2.2*6.10 - 26800*6.10

=163,724 - 163,480

=$244 Favorable