The standard cost of Product B manufactured by Mateo Company includes three unit
ID: 2387647 • Letter: T
Question
The standard cost of Product B manufactured by Mateo Company includes three units of direct materials at $5.00 per unit. During June, 28,000 units of direct materials are purchased at a cost of $4.70 per unit, and 28,000 units of direct materials are used to produce 9,000 units of Product BCompute the total materials variance and the price and quantity variances assuming the purchase price is $5.20 and the quantity purchased an used is 26,200 units
Total Materials variance $
Materials price variance $
Materials quantity variance $
Explanation / Answer
Total Material Variance
= $3,400 Favorable
Material Price Variance
= $8,400 Favorable
Material Quantity Variance
= $5,000 Unfavorable
Working:
Material Price Variance:
Material Price Variance
= Actual Quantity * (Standard Price - Actual Price)
= 28000 * ( 5 - 4.7)
= 28000 * 0.3
= $8,400 Favorable
Material Quantity Variance:
Actual Quantity for producing 9000 units of product "B"
= 28000 units
Standard Quantity for producing 1 unit of product "B" 3 uints material
= 9000 * 3
= 27000
Material Quantity Variance
= (Actual Quantity - Standard Quantity) * Standard Price
= (28000 - 27000) * 5
= 1000 * 5
= $5,000 Unfavorable
Total Material Variance
= (Standard Quantity * Standard Price) - (Actual Quantity * Actual Price)
= (27000 * 5) - (28000 * 4.7)
= 135000 - 131600
= $3,400 Favorable
Total Material Variance
= -$1,240 Unfavorable
Material Price Variance
= -$5,240 Unfavorable
Material Quantity Variance
= $4,000 Favorable
Working:
Material Price Variance
= Actual Quantity * (Standard Price - Actual Price)
= 26200 * (5 - 5.2)
= 26200 * -0.2
= -$5,240 Unfavorable
Material Quantity Variance
= (Actual Quantity - Standard Quantity) * Standard Price
= (26200 - 27000) * 5
= 800 * 5
= $4,000 Favorable
Total Material Variance
= (Standard Quantity * Standard Price) - (Actual Quantity * Actual Price)
= (27000 * 5) - (26200 * 5.2)
= 135000 - 136240
= -$1,240 Unfavorable
Total Material Variance
= $3,400 Favorable
Material Price Variance
= $8,400 Favorable
Material Quantity Variance
= $5,000 Unfavorable
Working:
Material Price Variance:
Material Price Variance
= Actual Quantity * (Standard Price - Actual Price)
= 28000 * ( 5 - 4.7)
= 28000 * 0.3
= $8,400 Favorable
Material Quantity Variance:
Actual Quantity for producing 9000 units of product "B"
= 28000 units
Standard Quantity for producing 1 unit of product "B" 3 uints material
= 9000 * 3
= 27000
Material Quantity Variance
= (Actual Quantity - Standard Quantity) * Standard Price
= (28000 - 27000) * 5
= 1000 * 5
= $5,000 Unfavorable
Total Material Variance
= (Standard Quantity * Standard Price) - (Actual Quantity * Actual Price)
= (27000 * 5) - (28000 * 4.7)
= 135000 - 131600
= $3,400 Favorable
Total Material Variance
= -$1,240 Unfavorable
Material Price Variance
= -$5,240 Unfavorable
Material Quantity Variance
= $4,000 Favorable
Working:
Material Price Variance
= Actual Quantity * (Standard Price - Actual Price)
= 26200 * (5 - 5.2)
= 26200 * -0.2
= -$5,240 Unfavorable
Material Quantity Variance
= (Actual Quantity - Standard Quantity) * Standard Price
= (26200 - 27000) * 5
= 800 * 5
= $4,000 Favorable
Total Material Variance
= (Standard Quantity * Standard Price) - (Actual Quantity * Actual Price)
= (27000 * 5) - (26200 * 5.2)
= 135000 - 136240
= -$1,240 Unfavorable
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