Varsity Rings produces class rings. Its best-selling model has a direct material standard of 13 grams of
Question:
Varsity Rings produces class rings. Its best-selling model has a direct material standard of 13 grams of a special alloy per ring. This special alloy has a standard cost of $75.00 per gram. In the past month, Varsity Rings purchased 28,500 grams of this alloy at a total cost of $2,128,950. A total of 26,100 grams were used last month to produce 2,000 rings.
Requirements
What is the actual cost per gram of the special alloy that Varsity Rings paid last month?
What is the direct materials price variance?
What is the direct materials quantity variance?
How might the direct materials price variance for Varsity Rings last month be causing the direct materials quantity variance?
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Step by Step Answer:
Actual direct material cost per unit 7470 Standard direct material cost per unit 7500 Di...View the full answer
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