Answered step by step
Verified Expert Solution
Question
1 Approved Answer
New York Ltd has set the following direct material standards per unit of product: 2.5 kg @ $3.00 per kg During April, actual direct material
New York Ltd has set the following direct material standards per unit of product: 2.5 kg @ $3.00 per kg During April, actual direct material purchased and used amounted to 8000 kg at a total cost of $3.10 per kg. Actual production amounted to 3000 units. Determine New York Ltd direct material quantity variance. See formulas below: Standard Costs Formulas as per your prescribed text book PQ - Purchased Quantity: AP - Actual Price; SP - Standard Price; AQ - Actual Quantity: SQ- Standard Quantity: AR - Actual Rate; SR - Standard Rate; AH - Actual Hours: SH - Standard Hours Material Variances Direct Material Price Variance (based on purchased quantity)=PQIAP-SP) / (PO X AP)-(POX SP) Direct Material Quantity Variance = SP(AQ - SQ) / (AQ X SP) - (SQ X SP) Total Material Variance - Price + Quantity from above a) $1,500(U) Ob) $800(0) Oc) $500(U) Od) $1,500(F)
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