Sonne Company produces a perfume called Whim. The direct materials and direct la

Question

Sonne Company produces a perfume called Whim. The direct materials and direct labor standards for one bottle of Whim are given below:

Compute the direct materials price and quantity variances for the month. (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.)

Sonne Company produces a perfume called Whim. The direct materials and direct labor standards for one bottle of Whim are given below:

Explanation / Answer

Hi,

Please find the answers as follows:

Material Price Variance = Actual Quantity of Material Purchased*(Actual Rate - Standard Rate) =18680 *(2.7 - 2.9) = 3736 (Favorable)

Material Quantity Variance = Standard Rate*(Actual Quantity Used - Standard Quantity) = 2.9*(14680 - 1700*7.4) = 6090 (Unfavorable)

Thanks.

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