candy stores Inc gives you the following information. the standard material cost

Question

candy stores Inc gives you the following information. the standard material cost is $7 per pound for a 15 pound bag of chocolate. the following is the actual cost and usage data:

Direct materials purchased and used: 186,000 pounds
Price paid for direct materials: $6 per pound
Number of bags produced: 12,000 units

a) using the information above provided for candy stores, compute the direct materials price variance for candy stores

b) using the information above provided for candy stores, compute the direct materials quantity variance for candy stores

c) using the information above provided for candy stores, compute the direct materials variance for candy stores.

Explanation / Answer

a) Material Price Variance Actual Material Quantity X Standard Material price = Standard Cost - Actual Material Quantity X Actual Material Rate = Actual Cost Variance 186000 X 7 1302000 - 186000 X 6 1116000 186000 b) Material Quantity Variance Standard Material Price X Standard Material Quantity = Standard Cost - Standard Material Price X Actual material Quanity = Actual Cost Variance 7 X 180000 1260000 - 7 X 186000 1302000 -42000 C) Material Variance Standard Material Price X Standard Material Quantity = Standard Cost - Actual Material Price X Actual material Quanity = Actual Cost Variance 7 X 180000 1260000 - 6 X 186000 1116000 144000 Material Price Variance a) 186000 F Material Quantity Variance b) 42000 U Material Variance a) + b) 144000 F

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