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Testbank Exercise 2 Thrope, Inc. purchased 1,600 pounds of direct material at a price of $1.10 per pound. The standard priceGrantham Manufacturing Company makes oak rocking chairs. Budgeted sales are 20,200 for July, 23,300 for August, 29,200 for SeOpen Show Work Click if you would like to Show Work for this question:Cooper Company, a retailer of camping supplies has budgeted activity for January using the following data: Cash sales $25,000

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Answer #1

Exercise 2
Direct Material price Variance = (Actual price - standard price) x Actual Quantity Purchased
= ($1.10 - $1.22) x 1600 = $192 (F)

Direct material quantity variance = (Actual quantity used - Standard quantity allowed) x Standard price
= (2000 - 1900) x $1.10 = $110 (U)

Production Budget
July August September 3rd Quarter
Budgeted Sales units 20200 23300 29200
Add : Desired Ending Inventory 2330 2920 3050
Units Required 22530 26220 32250
Less : Beginning Inventory 2860 2330 2920
Production Required 19670 23890 29330 72890

Note : I have answered 2 questions completely, kindly post other questions separately


Desired Ending Inventory = 10% of next months sales

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