Total Materials Variance

Krumple Inc. produces aluminum cans. Production of 12-ounce cans has a standard unit quantity of 4.9 ounces of aluminum per can. During the month of April, 250,000 cans were produced using 1,400,000 ounces of aluminum. The actual cost of aluminum was $0.21 per ounce and the standard price was $0.12 per ounce. There are no beginning or ending inventories of aluminum.

Required:

Calculate the total variance for aluminum for the month of April. Enter amount as a positive number and select Favorable or Unfavorable. $ Unfavorable

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1. Compute the actual costs = actual quantity x actual cost per unit; (AQ AP)
2. Compute the standard cost = standard quantity (units produced x standard unit quantity) x standard cost per unit; (SQ SP)
3. Subtract standard costs from the actual costs then determine if the result is favorable or unfavorable

Review the "How to Calculate the Total Variance for Materials" example in your text.