Question

Required information [The following information applies to the questions displayed below.] Hart Company made 3,060 b0okshelves using 22,060 board feet of wood costing $273,544. The company's direct materials standards for one bookshelf are 8 board feet of wood at $12.30 per board foot AQ Actual Quantity SQ Standard Quantity AP Actual Price SP Standard Price (1) Compute the direct materials price and quantity variances and classify each as favorable or unfavorable. (2) Hart applies management by exception by investigating direct materials variances of more than 5% of actual direct materials costs. Which direct materials variances will Hart investigate further?

Answer 1

Actual Cost AQ X AP 22060 X 12.40 273544 AQX 22060 X 271338 SP 12.30 Standard Cost SQ X SP 24480 X 12.30 301104 2206 29766 Direct Material Price Varaince 2206 Direct Material Quantity Varaince 29766 Total Direct Material Varaince 27560 ce 29766 Unfovarable Favorable Favorable Favorable Which Direct Material Varaince Will Hart Investigate Direct Material Price Varaince