Tharaldson Corporation makes a product with the following standard costs:
Standard Quantity or Hours | Standard Price or Rate | Standard Cost Per Unit | |||||||
Direct materials | 5.4 | ounces | $ | 3.00 | per ounce | $ | 16.20 | ||
Direct labor | 0.7 | hours | $ | 12.00 | per hour | $ | 8.40 | ||
Variable overhead | 0.7 | hours | $ | 9.00 | per hour | $ | 6.30 | ||
The company reported the following results concerning this product in June.
Originally budgeted output | 4,200 | units | |
Actual output | 4,200 | units | |
Raw materials used in production | 20,400 | ounces | |
Purchases of raw materials | 21,500 | ounces | |
Actual direct labor-hours | 5,300 | hours | |
Actual cost of raw materials purchases | $ | 42,900 | |
Actual direct labor cost | $ | 14,200 | |
Actual variable overhead cost | $ | 4,100 | |
The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.
The materials price variance for June is:
Garrison 16e Rechecks 2017-10-31
$1,935 U
$21,600 F
$21,600 U
$1,935 F
Answer
Material Price Variance |
||||||
( |
Standard Rate |
- |
Actual Rate = [$42900 / 21500 ounce] |
) |
x |
Actual Quantity purchased |
( |
$ 3.00 |
- |
$ 2.00 |
) |
x |
21500 |
21600 |
||||||
Variance |
$ 21,600.00 |
Favourable-F |
Tharaldson Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price...
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