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The cost accountant for Blue pharmaceuticals has informed you that the companys materials quantity variance for the drug allegro was exactly equal to its materials
The cost accountant for Blue pharmaceuticals has informed you that the companys materials quantity variance for the drug allegro was exactly equal to its materials price variance for the year. The companys normal level of production is 50 batches of Allegro per year. However, due to uncertainties regarding foundation funding, it produced only 25 batches during the current year. Other cost information regarding allegros direct materials is as follows: Standard price par gram of material $60 Actual kilograms purchased and used during the year. 100kg Actual cost of materials purchased during the period.... $6,000,000 Number of grams per kilogram.. 1,000grams a. Compute blues materials price variance. b. Compute the standard quantity of materials allowed per batch of allegro produced. c. Why would you not expect blue to have a large materials quantity variance?
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