Question

The standard cost of Product B manufactured by Pharrell Company includes 3.2 units of direct materials at $6.60 per unit. During June, 27,000 units of direct materials are purchased at a cost of $6.45 per unit, and 27,000 units of direct materials are used to produce 8,300 units of Product (a) Compute the total materials variance and the price and quantity variances. Total materials variance S Materials price variances Materials quantity variances Compute the total materials variance and the price and quantity variances, assuming the purchase price is $6.70 and the quantity purchased and used is 27,000 units. Total materials variances Materials price variances Materials quantity variances e Textbook and Media Attempts: 0 of 3 used Save for Later Submit Answer

Answer 1

a)

Total materials variance = (actual quantity x actual price per unit) - (standard quantity x standard price per unit)

=(27,000 x 6.45) - (26,560 x 6.60)

=-1,146

Material price variance = (actual price per unit - standard price per unit) x actual quantity

=(6.45 - 6.60) 27,000

=-4,050

Material quantity variance = standard price per unit x (actual quantity - standard quantity)

=6.60 x (27,000 - 26,560)

=2,904

b)

Total materials variance = (actual quantity x actual price per unit) - (standard quantity x standard price per unit)

=(27,000 x 6.70) - (26,560 x 6.60)

=5,604

Material price variance = (actual price per unit - standard price per unit) x actual quantity

=(6.70 - 6.60) 27,000

=2,700

Material quantity variance = standard price per unit x (actual quantity - standard quantity)

=6.60 x (27,000 - 26,560)

=2,904