Question

number one below

Gates Corporation reported the following information concerning its direct materials Direct materials purchased (actual) Standard cost of materials purchased Standard price times actual amount of materials used Actual production Standard direct materials costs per unit produced $ 673,000 $ 688,000 5400000 22 000 units $ 20 Required: Compute the direct materials cost variances (indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option) Direct Materials Price variance Eficiency variance Cost variances

number two below(please answer all parts)

Answer 1

Gates Corporation
Purchase Computations:
Actual costs = $673,000
Actual inputs at standard price = $688,000
Price variance = ($688,000 – $673,000) = $15,000 F
Usage Computations:
Actual inputs at standard price = $444,000
Flexible budget (Standard Allowed for Good Output) = $20 × 22,000 = $440,000
Efficiency variance = ($440,000 – $444,000) = $4,000 U
Price variance = $15,000 F
Efficiency variance = $4,000 U
Direct materials cost variances = $15,000 F – $4,000 U = $11,000 F