Simba Company’s standard materials cost per unit of output is $10 (2 pounds x $5
ID: 2464316 • Letter: S
Question
Simba Company’s standard materials cost per unit of output is $10 (2 pounds x $5). During July, the company purchases and uses 3,200 pounds of materials costing $16,192 in making 1,500 units of finished product.
Compute the total, price, and quantity materials variances. (Round per unit values to 2 decimal places, e.g. 52.75 and final answers to 0 decimal places, e.g. 52.)
$
UnfavorableNeither favorable nor unfavorableFavorable Materials price variance$
UnfavorableFavorableNeither favorable nor unfavorable Materials quantity variance$
UnfavorableFavorableNeither favorable nor unfavorableExplanation / Answer
Total materials variance
= Actual cost of actual output - Standard cost of actual output
= $16,192 - 1,500 x $10
= $ 16192 - $ 15000
= $ 1,192 unfavorable
The variance is unfavorable as the actual cost is more than the standard cost
Materials price variance
= Actual Cost - Actual Quantity x Standard Price
= $16,192 - 3,200 x $5
= $ 192 unfavorable
The variance is unfavorable as the actual price per unit of raw material is more than the standard price
Materials quantity variance
= Actual Quantity x Standard Price - Standard Quantity x Standard Price
Standard quantity per unit of output
= 2 pounds x 1,500 units
= 3,000 units
Materials quantity variance
= 3,200 x $5 - 3,000 x $5
= $ 1,000 Unfavorable
The variance is unfavorable as the actual quantity of materials consumed is more than the standard quantity.
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.