Question
University Rings produces class rings. Its best-selling model has a direct materials standard of 11 grams of a special alloy per ring. This special alloy
University Rings produces class rings. Its best-selling model has a direct materials standard of 11 grams of a special alloy per ring. This special alloy has a standard cost of $ 65.10 per gram. In the past month, the company purchased 12000 grams of this alloy at a total cost of $ 774000. A total of 11600 grams were used last month to produce 1000 rings.
1. | What is the actual cost per gram of the special alloy that University Rings purchased last month? |
2. | What is the direct material price variance? |
3. | What is the direct material quantity variance? |
4. | How might the direct material price variance for the company last month be causing the direct material quantity variance? |
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