PAST N ses a number of items for upscale hotels and resorts a customized shampoo

Question

PAST N ses a number of items for upscale hotels and resorts a customized shampoo bottle called HYDRATE, has the NNNS, guentty and oost cost standards related to one bottle of HYDRATE 3 O beaspoons of coconut oil (direct material used to Stanterd nice $1.00 per teaspoon of coconut oil During the most recent month, the following activity was recorded: ,000 easpoons of coconut oil were purchased at a cost of $1.20 per 000 teaspoons . All of the coconut oil was used to produce 3,000 bottles of HYDRATE. 3. Compute the direct materials price variance for the month 4 Compute the direct materials quantity variance for the

Explanation / Answer

Solution:

1 Direct material price variance = ( Standard price per teaspoon - Actual price per teaspoon ) * Standard Quantity Standard price per teaspoon 1 Actual price per teaspoon - 1.20 Standard Quantity 9,000 Direct material price variance - 1,800 2 Direct material quantity variance = ( Standard quantity for actual output - Actual quantity ) * Standard price per pound Standard Quantity 9,000 actual quantity 10,000 Actual price per teaspoon - 1.20 Direct material quantity variance - 1,200

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