The standard cost of Product B manufactured by Sancho Company includes3.60units
ID: 2359891 • Letter: T
Question
The standard cost of Product B manufactured by Sancho Company includes3.60units of direct materials at $6.20per unit. During June,26,900units of direct materials are purchased at a cost of $6.02per unit, and26,900units of direct materials are used to produce7,400units of Product B.
(a) Compute the total materials variance and the price and quantity variances.
THE DROP DOWN MENUS ARE: UNFAVORABLE, FAVORABLE, AND NEITHER FAVORABLE NOR UNFAVORABLE.
(b) Repeat (a), assuming the purchase price is $6.33and the quantity purchased and used is26,900units.
$
Materials price variance
$
Materials quantity variance
$
Explanation / Answer
(A) Total Variance = 3230 (FAVORABLE) Price Variance = (6.02-6.20) *26900 = 4842 (FAVORABLE) Qty Variance = (26900 - 26640) * 6.2 = 1612 (UNFAVORABLE) (B) Total Variance = 5109 (UNFAVORABLE) Price Variance = (6.33-6.20) *26900 = 3497 (UNFAVORABLE) Qty Variance = (26900 - 26640) * 6.2 = 1612 (UNFAVORABLE)
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