Question
Sitka Industries uses a cost system that carries direct materials inventory at a standard cost. The controller has established these standards for one ladder (unit):
Sitka Industries uses a cost system that carries direct materials inventory at a standard cost. The controller has established these standards for one ladder (unit):
Standard Quantity | x | Standard Price | = | Standard Cost | |
Direct materials | 3 pounds | $4.40 per pound | $13.20 | ||
Direct labor | 2.00 hours | 12.00 per hour | 24.00 | ||
Total cost | $37.20 |
Sitka Industries made 2,900 ladders in July and used 8,500 pounds of material to make these units. Sitka Industries bought 15,500 pounds of material in the current period. There was a $250 unfavorable direct materials price variance.
Enter all amounts as positive numbers.
A. How much in total did Sitka pay for the 15,500 pounds?
Amount paid $fill in the blank 1
B. What is the direct materials quantity variance?
Direct materials quantity variance $fill in the blank 2 Favorable
C. What is the total direct materials cost variance?
Total direct materials cost variance $fill in the blank 4 Favorable
D. What if 9,100 pounds were used to make these ladders, what would be the direct materials quantity variance?
Direct materials quantity variance $fill in the blank 6 Unfavorable
E. If there was a $340 favorable direct materials price variance, how much did Sitka pay for the 15,500 pounds of material?
Amount paid $fill in the blank 8
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