The standard cost of Product B manufactured by Pharrell Company includes 3 units

Question

The standard cost of Product B manufactured by Pharrell Company includes 3 units of direct materials at $5 per unit. During June, 29,000 units of direct materials are purchased at a cost of $4.7 per unit, and 29,000 units of direct materials are used to produce 9,400 units of Product B.

(a)

Compute the total materials variance and the price and quantity variances.

(b)

Compute the total materials variance and the price and quantity variances, assuming the purchase price is $5.15 and the quantity purchased and used is 28,000 units.

Total materials variance $ FavorableNeither favorable nor unfavorableUnfavorable Materials price variance $ Neither favorable nor unfavorableFavorableUnfavorable Materials quantity variance $ FavorableUnfavorableNeither favorable nor unfavorable

Explanation / Answer

Answer: a

b.

Total material variance is given by ( standard quantity x standard price x actual output) - ( actual quantity x actual price xactual output)

Materials price variance is calculated as ( standard unit price - actual unit price) x actual quantity of materials used

Materials quantity variance is calculated as ( standard quantity specified for actual production - actual quantity used ) x standard price per unit

Total Material Variance $ 4,700 Favorable Total Price Variance $ 8,700 Favorable Total Quantity Variance $4,000 Unfavorable

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.