Question
Roland Fruits Inc. produces peach jam. The company developed the following standard costs for a jar of jam: Grams Cost per Gram Total Cost Direct
Roland Fruits Inc. produces peach jam.
The company developed the following standard costs for a jar of jam:
Grams | Cost per Gram | Total Cost | |
Direct materials | 60.00 | $0.20 | $12.00 |
The actual results for the year are:
Units produced | 220,000 |
Direct materials purchased and used (grams) | 13,420,000 |
Direct materials cost per gram | $0.18 |
Required:
Calculate the direct material price and usage (also called efficiency) variances and use your solution to answer the following questions.
NOTE: Please enter all variances as positive numbers.
The amount of the direct material price variance is $____________.
Indicate if the direct material price variance is favourable (enter the letter F) or unfavourable (enter the letters UF).
The amount of the direct material usage variance (also called efficiency variance) is $____________.
Indicate if the direct material usage variance is favourable (enter the letter F) or unfavourable (enter the letters UF).
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