Exercise 6-7 Coronado Gold manufactures award medals. In August, Coronado produc

Question

Exercise 6-7 Coronado Gold manufactures award medals. In August, Coronado produced 6,000 medals, 105 more than expected. During the month, the company purchased 1,150 ounces of gold for $938,000 The standard price for the gold is $823 per ounce. The company actually used 979 ounces of gold for production. Calculate Coronado's direct materials price variance for the month. (If variance is zero, select "Not Applicable" and enter O for the amounts.) Direct material price variance$ Click if you would like to Show Work for this question: Open Show Work

Explanation / Answer

Answer to Part 1 Standard Price 823 Actual Quantity 1150 Actual Quantity*Actual Price 938000 Direct Material Price Variance = (Actual Quantity*Standard Price) - (Actual Quantity * Actual Price) Direct Material Price Variance = (1150*823) - (938000) Direct Material Price Variance = (946450) - (938000) Direct Material Price Variance = 8450 Favouarable Answer to Part 2 Standard Quantity (1.45*787) 1141.15 Standard Price 5 Actual Quantity 1220 Direct Material Quantity Variance = Standard Price*(Standard Quantity - Actual Quantity) Direct Material Quantity Variance = 5*(1141.15 - 1220) Direct Material Quantity Variance = 5*(-78.85) Direct Material Quantity Variance = -394.25 Direct Material Quantity Variance = 394.25 Unfavourable Answer to Part 3 Standard Rate 6 Actual Rate*Actual Hours 24000 Labour Rate Variance 900 Unfavourable Labour rate variance (Actual Hours*Standard rate) - (Actual Hours*Actual rate) -900 (Actual Hours*6) - 24000 -900 (Actual Hours*6) - 24000 -900+24000 Actual Hours*6 23100 Actual Hours*6 23100/6 Actual Hours 3850 Actual Hours

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