Question

Direct Materials Variances Silicone Engine Inc. produces wrist-worn tablet computers. The company uses Thin Film Crystal (TFC) LCD displays for its products. Each tablet uses one display. The company produced 450 tablets during December. However, due to LCD defects, the company actually used 600 LCD displays during December. Each display has a standard cost of $6.40. LCD displays were purchased for December production at a cost of $3,540 Determine the price variance, quantity variance, and total direct materials cost variance for December Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. And, enter your final variance amount to the nearest whole dollar Price variance $ -660 Favorable Quantity variance 300 Unfavorable Total direct materials cost variance $ -960 X Unfavorable

Answer 1

Actual Quantity (AQ) - 600 Standad Quantity (SQ) - 450 Actual Puice (AP) - $3540 - $5.9 600 Slandud Ruce - $6.40 → Dlueet material Puice viiance = (SPX AQ) - CAP XAQ) ($6.40 x 600) + ($59x600) - $3840 - $ 8540 $300 (fallowable) - Duleet material Quantity Touriance 2 (SQXSP) - CAQXSP) - (450x $6.40) - (6000 86.401 - $ 2880 - $3840 $960 (unfavouabW → Duelt morterial Cost volcance • CSQ eSP) - CAQXAP) - (450x $6:40 ) - (600x $5.9) - $2880 - $ 8540 = $660 (untavouable) favoueable Purce variance Quantity variance $ $ -300 960 untauowable Cost variance 660 Contatouable