Exercise 11-5 The standard cost of Product B manufactured by Pharrell Company in

Question

Exercise 11-5 The standard cost of Product B manufactured by Pharrell Company includes 3.5 units of direct materials at $5.1 per unit. During June, 27,300 units of direct materials are purchased at a cost of $4.90 per unit, and 27,300 units of direct materials are used to produce 7,700 units of Product B. Compute the total materials variance and the price and quantity variances Total materials variance Materials price variance Unfavorable Neither favorable nor unfavorable Favorable Materials quantity variance s 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 26,700 units. Total materials variance Materials price variance Materials quantity variance

Explanation / Answer

a) Total Material variance = (7700*3.5*5.1)-(27300*4.9) = 3675 favorable

Material price variance = (5.1-4.9)*27300 = 5460 Favorable

Material quantity variance = (7700*3.5-27300)*5.1 = 1785 Unfavorable

b) Total material variance = (7700*3.5*5.1)-(26700*5.15) = 60 U

Material price variance = (5.1-5.15)*26700 = 1335 U

Material quantity variance = (7700*3.5-26700)*5.1 = 1275 F

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