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 3,800 chopping boards using 2,280 board feet of hardwood. The hardwood cost the company $15,048.

     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 3,800 chopping boards using 2,280 board feet of hardwood. The hardwood cost the company $15,048.

Explanation / Answer

The standard price for chopping blocks is (2.5 x $1.80 per block) = $4.50 per chopping block.

So, for 4,000 chopping blocks, the cost should have been (4,000 x $4.50) = $18,000

Actual cost was $18,700, so that's $700 greater than the standard. (Unfavorable)
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2) Materials price variance = AQ * (AP - SP) = 11,000 * ($1.70 - $1.80) = - $1,100 (Unfavorable)

Materials quantity variance = SP * (AQ - SQ) = $1.80 * (11,000 - 10,000) = $1,800 (Favorable)
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Sorry, my math is messed up (not really, but I have certain other issues to contend with at the moment - I hope that my answer was of some help however. I couldn't reconcile it properly for you sorry - must have missed a + or - sign somewhere. Sorry again.

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