Question
1. The following standards have been established for a raw material used to make product O84: Standard quantity of the material per unit of output
1. The following standards have been established for a raw material used to make product O84:
Standard quantity of the material per unit of output | 9.0 | meters | |
Standard price of the material | $ | 19.80 | per meter |
|
The following data pertain to a recent month's operations:
Actual material purchased | 5,300 | meters | |
Actual cost of material purchased | $ | 107,060 | |
Actual material used in production | 5,200 | meters | |
Actual output | 690 | units of product O84 | |
|
The direct materials purchases variance is computed when the materials are purchased.
Required:
a. What is the materials price variance for the month?
b. What is the materials quantity variance for the month?
2. Handerson Corporation makes a product with the following standard costs:
Standard Quantity or Hours | Standard Price or Rate | ||||||||||
Direct materials | 10.2 | kilos | $ | 7.70 | per kilo | ||||||
Direct labor | 0.3 | hours | $ | 37.00 | per hour | ||||||
Variable overhead | 0.3 | hours | $ | 7.70 | per hour | ||||||
|
The company reported the following results concerning this product in August.
Actual output | 4,900 | units | |
Raw materials used in production | 30,730 | kilos | |
Purchases of raw materials | 33,300 | kilos | |
Actual direct labor-hours | 1,100 | hours | |
Actual cost of raw materials purchases | $ | 212,920 | |
Actual direct labor cost | $ | 24,436 | |
Actual variable overhead cost | $ | 9,240 | |
|
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 variable overhead rate variance for August is:
Multiple Choice
- $1,029 F
- $770 F
- $770 U
- $1,029 U
I will make sure to rate this well if it answered completely.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started