Question
A: Ivanhoe, Inc. uses a standard cost system in which direct materials are carried at standard cost. Standards for one unit of product are: standard
A: Ivanhoe, Inc. uses a standard cost system in which direct materials are carried at standard cost. Standards for one unit of product are: standard quantity of 9.0 gallons and standard price $ 1.95 per gallon. During March, Ivanhoe purchased 151,500 gallons of direct materials at a cost of $ 301,500 and used 152,000 gallons in production of 19,500 units. Calculate the direct materials price and quantity variances and indicate whether each variance is favorable or unfavorable.
B:
Edward Company makes and sells laundry duffel bags. Each duffel bag sells for $ 30 and has a unit variable cost of $ 13. The company has provided the following budgeting data for March:
Sales (all cash sales) | $ 34,800 | |
Cash balance on March 1 | 5,000 | |
Cash disbursements during the month | 37,800 | |
A minimum cash balance on March 31 | 4,000 |
If necessary, Edward will borrow cash from the local bank in multiples of $1,000.
How many units did Edward budget to sell during March?
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