Exercise 223 Fill in the appropriate amounts in the following Adam Corporation v

Question

Exercise 223

Fill in the appropriate amounts in the following Adam Corporation variance report. (Round actual and standard price to 2 decimal places, e.g. 52.75.)

ADAM CORPORATION
Variance Report—Purchasing Department
for Week Ended January 9, 2016 Type of
Materials Quantity
Purchased Actual
Price Standard
Price Price
Variance Explanation Brown

lbs. $5.25 $5.00 $6,000

FavorableUnfavorable

Price increase Green 8,000 oz.

3.25 1,600 Unfavorable Rush order White 22,000 units $0.45

660 Favorable Bought larger quantity

Explanation / Answer

Formula = (actual price - standard price)* AQ purchased Brown (5.25- 5.00)*x   = 6000U .25x   = 6000 x= 24000 lbs answer Green (x -3.25)*8000   = 1,600 8000x - 26000=1600 x                  = (1600+26000)/8000 3.45 answer White (.45-x)*22000 = 660 9900 -22000x   = 660 x                                = (660+9900)/22000 0.48 answer

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