Question
Domanski Incorporated has established the following raw material standards for its APL4 product: Standard quantity of the material per unit of output 4.5 pounds Standard
Domanski Incorporated has established the following raw material standards for its APL4 product:
Standard quantity of the material per unit of output | 4.5 | pounds |
Standard price of the material | $13.90 | per pound |
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The following data pertain to a recent month's operations:
Actual material purchased | 2,000 | pounds |
Actual cost of material purchased | $26,200 | |
Actual material used in production | 1,300 | pounds |
Actual output | 220 | units of product I92 |
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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 a reasonable explanation for this variance?
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c. What is the materials quantity variance for the month?
d. What is a reasonable explanation for this variance?
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