Exercise 23-5

The standard cost of Product B manufactured by Pharrell Company includes 3.7 units of direct materials at $6.2 per unit. During June, 27,100 units of direct materials are purchased at a cost of $6.10 per unit, and 27,100 units of direct materials are used to produce 7,200 units of Product B. (a) Compute the total materials variance and the price and quantity variances.

Total materials variance $ Favorable Unfavorable Neither favorable nor unfavorable Materials price variance $ Unfavorable Favorable Neither favorable nor unfavorable Materials quantity variance $ Neither favorable nor unfavorable Favorable Unfavorable

(b) Compute the total materials variance and the price and quantity variances, assuming the purchase price is $6.30 and the quantity purchased and used is 27,000 units.

Total materials variance $ Neither favorable nor unfavorable Favorable Unfavorable Materials price variance $ Favorable Neither favorable nor unfavorable Unfavorable Materials quantity variance $ Favorable Unfavorable Neither favorable nor unfavorable