Slick Corporation is a small producer of synthetic motor oil. During May, the co
ID: 2375812 • Letter: S
Question
Slick Corporation is a small producer of synthetic motor oil. During May, the company produced 5,000 cases of lubricant. Each case contains twelve quarts of synthetic oil. To achieve this level of production, Slick purchased and used 16,500 gallons of direct materials at a cost of $20,725.
Compute the materials price and quantity variances. (U or F)
Compute the labor rate and efficiency variances (U or F)
Compute the manufacturing overhead spending and volume variances. (U or F)
a.Compute the materials price and quantity variances. (U or F)
b.
Compute the labor rate and efficiency variances (U or F)
c.
Compute the manufacturing overhead spending and volume variances. (U or F)
Explanation / Answer
Standard Quantity at Standard Price (SQSP) = 5000 x 12 x 0.25 x 1.3 = $19500
Actual Quantity at Standard Price (AQSP) = 16500 x 1.3 = $21450
Actual Quantity at Actual Price (AQAP) = $21165
Material Price Variance = AQSP - AQAP = 21450 - 21165 = $285 F
Material Quantity Variance = SQSP - AQSP = 19500 - 21450 = $1950 U
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.