Subatomic Shirts' standard cost included 0.70 metres of direct material per t-shirt at $3.80 per metre....
Subatomic Shirts' standard cost included 0.70 metres of direct material per t-shirt at $3.80 per metre. Subatomic actually used 32,500 metres of direct material at a cost of $3.75 per metre to produce 50,000 t-shirts.
a) Calculate the direct materials price variance: $
b) Is the direct materials price variance favourable or unfavourable?
c) Calculate the direct materials quantity variance: $
d) Is the direct materials quantity variance favourable or unfavourable?
e) Calculate the total direct materials variance: $
f) Is the total direct materials variance favourable or unfavourable?
Homework Answers
|
Materials Price Variance = (SP-AP) * AQ = (3.80-3.75)*32500 = 1625 |
|
| FAVOURABLE | |
|
Materials Quantity Variance = (SQ-AQ) * SP = (0.70*50,000 - 32,500)* 3.80 = 2500 |
|
| FAVOURABLE | |
|
Total direct materials variance = 1625 F + 2500 F = 4125 |
|
| FAVOURABLE |
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