The following information summarizes the standard cost for producing one metal t
ID: 2438656 • Letter: T
Question
The following information summarizes the standard cost for producing one metal tennis racker frame at Spaulding Industries. In addition, the variances for one month's production are given. Assume that all inventory accounts have zero balances at the beginning of the month. Standard CostStandard Per Unit $4.50 4.80 Monthly Costs $9,000 14,400 Materials Direct Labor 2 hrs. @ $2.40 Factory Overhead: Variable Fixed 2.00 4.00 $15.30 6,000 12,000 $41.400 Variances: Material price Material quantity Labor rate Labor efficiency 330.00 unfavorable 900.00 unfavorable 660.00 favorable 2,640.00 unfavorable What was the actual price paid for the direct material during the month, assuming all materials purchased were put into production? O $4.91 O $512 O $4.50. O $4.65.Explanation / Answer
Actual price paid for the direct material is $4.65 which is calculated as below:- Calculation of actual quantity = Material quantity variance = (900) = Actual Quantity = (9,000+900)/4.5 = Actual Quantity = 2,200 Now, Material price variance = (330) = (Standard price-Actual price)*Actual quantity = (330) = (4.5-AP)*2,200 = (330) = 9,900-2,200AP =(330) = 10230=2,200AP = 4.65
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