Question

Steel Plastic Product Names Direct materials information Standard pounds per unit Standard Price (SP) per pound Actual Quantity (AQ) used per unit Actual Price (AP) paid for material Actual Quantity Purchased (AQP) and used Price variance Quantity variance Flexible budget variance Number of units produced 2 lb. $3.25 1.5 lbs. $1.50 2,000 lbs. ? $650 U ? 400 2.5 lb. ? 3.5 lbs. $2.00 1,100 lbs. $1,232 F ? $726 F 575 What is the direct material quantity variance for plastic in the dolls?

Answer 1

Plastics

Direct material price variance = ( Actual Price - Standard price ) x Actual quantity used

- 1,232 = ( 2 - Standard Price ) x ( 575 x 3.5 )

- 1,232 = ( 2 - Standard Price ) x 2,012.50

- 1,232 = 4,025 - 2,012.50 Standard price

2,012.50 Standard price = 4,025 + 1,232

2,012.50 Standard price = 5,257

Standard price = 5,257 / 2,012.50

Standard price = $ 0.6122

Direct material Quantity Variance = ( Actual Quantity - Standard Quantity ) x Standard price

= ( ( 575 x 3.50 ) - ( 575 x 2.50 ) ) x 0.6122

= ( 2,012.50 - 1,437.50 ) x 0.6122

= 575 x 0.6122

= $ 352 Unfavorable