Home Company manufactures tables with vinyl tops. The standard material cost for

Question

Home Company manufactures tables with vinyl tops. The standard material cost for the vinyl user per Type-R table is $7.80 based on six square feet of vinyl at a cost of $1.30 per square foot. A production run of 1,000 tables in January 20XX resulted in usage of 6,400 square feet of vinyl at a cost of $1.20 per square foot, a total cost of $7,680. Raw materials are carried at actual cost.

Compute:

a)     a)  Materials quantity variance.

b)     b)  Materials price variance.  

NoNote: Please provide detailed works toward solutions.

dd

Explanation / Answer

a. MQV=(SQ-AQ)*SP

=(6000-6400)*1.3=-520

Standard quantity=1000*6=6000

So, MQV=520 unfavorable

b. MPV=(SP-AP)*AQ

=(1.3-1.2)*6400=640 favorable

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