Boxes Company has collected the following data for one of its products: Direct m

Question

Boxes Company has collected the following data for one of its products:

Direct materials standard (3 pounds per unit @ $1/lb.) $3 per finished good
Direct materials flexible budget variance-unfavorable $14,000
Actual direct materials used 100,000 pounds
Actual finished goods produced 25,000 units

1.
.  What is the total actual cost of the direct materials used?

2.

What is the actual cost of the direct materials used per pound?

3.

How much is the direct materials efficiency variance?

4.

How much is the direct materials price variance?

Explanation / Answer

A

Direct Material Variance = Std Cost - Actual Cost
14000 (u) = 3*25000 - Actual Cost
Actual Cost = 75000 + 14000 = $89000

B
Actual cost / pound = 89000/100000 = $0.89/pound

C
direct materials efficiency variance = (std qty - act qty)*std price
= (3*25000 - 100000)*1
= $25000 (U)

D
direct materials price variance = (std price - act price)*act qty
= (1-0.89)*100000
= $11000 (F)

Related Questions

Navigate

• Browse (All)
• Browse B
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.