TFW 8:59 PM Touch to return to 00:35 ezto.mheducation.com Griffen Company makes

Question

TFW 8:59 PM Touch to return to 00:35 ezto.mheducation.com Griffen Company makes pipe using metal. The company uses a standard costing system. Variable overhead is allocated on the basis of direct material usage (pounds). Overhead is allocated to units based on expected production of 12,800 units. Griffen maintains a materials inventory, so the amount of material used is not necessarily the same as the amount of material purchased in any one month The standard cost sheet for a unit of pipe follows hous a2 08.00 August financial results show that the average purchase price of metal was $10.50 per pound. The purchase price variance $34,710 unfavorable. The variable overhead efficiency variance was 8,800 unfavorable. Good output produced totaled 15,800 units. Required: a. How many pounds of metal were purchased in August? (Do not round intermediate b. What was the direct material efficiency variance in August? (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.) c. How many pounds of metal were used in August? (Do not round intermediate elerences B&Resources;

Explanation / Answer

Std material Qty per unit of output: 8 pounds Actual output: 15800 units Std Material Qty for actual output (15800*8): 126400 pounds Std price per pound: $ 10 per pound Actual price per pound: $ 10.50 per pound Material Price variance: 34710 Unfav Req a: Material Price variance: Actual Qty purchased (Std price - Actual price) 34710 U = Actual Qty purchased (10-10.50) Actual Qty purchased = 69420 popunds Req b: Variable Efficiency Variance: Std Oh rate per pound (Std qty - Actual Qty) 8800U = 4 (126400 -Actual Qty used) Actual Qty used: 128600 Pounds Material Efficiency variance: Std price (Std qty-Actual Qty used) 10 (126400-128600)= 22000 Unfav Req c: Variable Efficiency Variance: Std Oh rate per pound (Std qty - Actual Qty) 8800U = 4 (126400 -Actual Qty used) Actual Qty used: 128600 Pounds

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