Question

0 Required information Use the following information for the Exercises below. [The following information applies to the questions displayed below.] Hart Company made 3,800 bookshelves using 20,000 board feet of wood costing $258,000. The company's direct materials standards for one bookshelf are 6 board feet of wood at $12.80 per board foot. Exercise 8-13 Computation and interpretation of materials variances LO P2 (1) Compute the direct materials price and quantity variances incurred in manufacturing these bookshelves. AQ Actual Quantity SQ Standard Quantity AP Actual Price SP Standard Price

Answer 1

Answer

• All working forms part of the answer
• Requirement

Actual Cost								Standard Cost
AQ	x	AP		AQ	x	SP		SQ	x	SP
20,000	x	$                   12.90 [258000/20000]		20,000	x	$          12.80		22,800 [3800 x 6]	x	$            12.80
	$          258,000.00 [20000 x 12.90]				$      256,000.00				$      291,840.00 [22800 x 12.80]
Price Variance - Material			$       2,000.00 [258000 – 256000]	Quantity Variance - Material			$              35,840.00 [291840 – 256000]

Direct material Price Variance	$       2,000.00	Unfavourable
Direct material Quantity Variance	$     35,840.00	Favourable
Total Direct material Variance	$     33,840.00	Favourable