Question

World Class Rings produces class rings. Its best-selling model has a direct materials standard of 16 grams of a special alloy per ring. This special alloy has a standard cost of $63.30 per gram. In the past month, the company purchased 16,800 grams of this alloy at a total cost of $1,061,760. A total of 16,300 grams were used last month to produce 1,000 rings. Read the requirements. Requirement 1. What is the actual cost per gram of the special alloy that World Class Rings purchased last month? (Round your answer to the nearest cent.) The actual cost per gram of the special alloy that World Class Rings purchased last month is $ L Requirement 2. What is the direct material price variance? (Abbreviations used: DM = Direct materials) Begin by determining the formula for the price variance, then compute the price variance for direct materials. (Enter the variance as a positive number. Round interim calculations to the nearest cent and your variance amount to the nearest whole dollar. Label the variance as favorable (F) or unfavorable (U).) ) = DM price variance Requirement 3. What is the direct material quantity variance? (Abbreviations used: DM = Direct materials) Determine the formula for the quantity variance, then compute the quantity variance for direct materials. (Enter the variance as a positive number. Round interim calculations to the nearest cent and your variance amount to the nearest whole dollar. Label the variance as favorable (F) or unfavorable (U).) ) = DM quantity variance ]) = D Requirement 4. How might the direct material price variance for the company last month be causing the direct material quantity variance? The V. As a result, the company Valloy than the standard allows. This accounts for the direct material price variance might mean that World Class Rings purchased a quantity (efficiency) variance. Choose from any list or enter any number in the input fields and then continue to the next question.

Answer 1

0-256 WEEK 16 Saturday 19 (1) Actual cost = per gram $ 1061760 16800 gram of alloy = Total Actual lost Actual Purchases = $63.20 per gram 10 (21) Direct Material Pric variance = Actual quantity X / Std Price - Actual Price) $ 1700 16300 * ($63.30 -63:20) 16300 * 1 0.10) = $16301 ) 01 = 02 03 3.) 04 Direct Material quantity Variance = Std-Price x T Std Quantity - Actual quantity) 63. 70 x / 16000-C 16 300 sya ncrae quanting) = $ s $63.30 X 300 = $18990 (U) Evening Forening (d) SUNDAY 20 The Direct Material price variance is lavourable which might mean purchased a lower quality alloly. og As a result more alloy than required. This accome for the Unfavourable quantity Variance, S F 9 S 10 S 11 M T 12 13 W 14 F 16 S 17 S 18 M 19 T 20 W T F 21 22 23 S 24 S 25 M 26 2008 T F S S M T W T MAY 1 2 3 4 5 6 7 8 Scanned with CamScanner T W 27 28 T F 30 15 29