Question
Harmon Household Products, Inc., manufactures a number of consumer items for general household use. One of these products, a chopping board, requires an expensive hardwood.
Harmon Household Products, Inc., manufactures a number of consumer items for general household use. One of these products, a chopping board, requires an expensive hardwood. During a recent month, the company manufactured 3,000 chopping boards using 2,010 board feet of hardwood. The hardwood cost the company $13,266.
The company's standards for one chopping board are 0.57 board feet of hardwood, at a cost of $7.00 per board foot.
Required:
1. According to the standards, what cost for wood should have been incurred to make 3,000 chopping blocks? How much greater or less is this than the cost that was incurred?
N N bl |
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umber of chopping blocks |
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umber of board feet per chopping ock |
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Standard board feet allowed
Standard cost per board foot
Total standard cost
Actual cost incurred
Standard cost
Spending variance-unfavorable
2. Break down the difference computed in (1) above into a materials price variance and a materials quantity variance.(lndicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)
Mat erials price variance
Materials quantity variance
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