Harmon Household Products, Inc., manufactures a number of consumer items for gen

Question

Harmon Household Products, Inc., manufactures a number of consumer items for general household use. One of these products, a chopping board, requires an expensive hardwood. During a recent month, the company manufactured 3,400 chopping boards using 2,380 board feet of hardwood. The hardwood cost the company $18,088.

The company

Harmon Household Products, Inc., manufactures a number of consumer items for general household use. One of these products, a chopping board, requires an expensive hardwood. During a recent month, the company manufactured 3,400 chopping boards using 2,380 board feet of hardwood. The hardwood cost the company $18,088.

Explanation / Answer

Break down the difference computed in (1) above into a materials price variance and a materials quantity variance. Actual quantity = 2380 Actual price = 18088/2380 = $7.60 Standard quantity = 0.65*3400 = 2210 Standard price = $8,00 Materials price variance = AQ(AP-SP) = 2380*(7.60-8) = -952 Materials quantity variance = SP(AQ-SQ) = 8*(2380-2210) = 1360 ANswer: Materials price variance = $952 favorable and Materials quantity variance = $1360 unfavorable

Related Questions

Navigate

• Browse (All)
• Browse H
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.