Question

Tk Saved Required information [The following information applies to the questions displayed below.) A manufactured product has the following information for June. Standard (5 lbs. @ $8 per Actual lbs. @ $8.10 per Direct materials 1b.) 35,400 1b. 20,800 Direct labor hrs. @ $16.50 per (3 hrs. @ $16 per hr.) (3 hrs. @ $13 per hr.) Overhead Units manufactured $279,900 7,000 Compute the direct materials price variance and the direct materials quantity variance. Indicate whether

Answer 1

Answer

Material Price Variance
(	Standard Rate	-	Actual Rate	)	x	Actual Quantity
(	$                                8.00	-	$                       8.10	)	x	35400
	-3540
	Variance		$              3,540.00			Unfavourable-U
Material Quantity Variance
(	Standard Quantity	-	Actual Quantity	)	x	Standard Rate
(	35000	-	35400	)	x	$                           8.00
	-3200
	Variance		$              3,200.00			Unfavourable-U

OR, this can be solved as below

Actual Cost								Standard Cost
AQ	x	AP		AQ	x	SP		SQ	x	SP
35,400	x	$                     8.10		35,400	x	$           8.00		35,000	x	$               8.00
	$                    286,740.00				$               283,200.00				$                   280,000.00
Price Variance - Material			$                 3,540.00	Quantity Variance - Material			$                 3,200.00

Direct material Price Variance	$                 3,540.00	Unfavourable
Direct material Quantity Variance	$                 3,200.00	Unfavourable
Total Direct material Variance	$                 6,740.00	Unfavourable