The following materials standards have been established for a particular product
ID: 2557586 • Letter: T
Question
The following materials standards have been established for a particular product Standard quantity per unit of output Standard price 2.7 grams $14.00 per grams The following data pertain to operations concerning the product for the last month: Actual materials purchased Actual cost of materials purchased Actual materials used in production 1,500 grams $17475 1,400 grams 370 units Actual output The direct materials purchases variance is computed when the materials are purchased. Required a. What is the materials price variance for the month? (Input the amount as a positive value. Leave no cells blank be certain to enter "O" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "S" sign in your response.) price varianceTCick o select) (Click to select) vExplanation / Answer
1
Material price variance = (Standard price-actual price)*actual output
Standard price per unit ($14*2.7grams)
$37.80
Actual price (17,475/1,500)*(1,400/370)
$44.08
Actual output units
370
Ans
Material price variance = (44.08-37.80)*370
($2,324)
Unfavourable
2
Material quantity variance =(Standard usage in units - Actual usage in units) x Standard cost per unit
Standard usage in units = 2.7*370
999
Actual units
1,400
Standard cost per unit
$14
Ans
Material quantity variance =(1400-999)*14
($5,614)
Unfavourable
1
Material price variance = (Standard price-actual price)*actual output
Standard price per unit ($14*2.7grams)
$37.80
Actual price (17,475/1,500)*(1,400/370)
$44.08
Actual output units
370
Ans
Material price variance = (44.08-37.80)*370
($2,324)
Unfavourable
2
Material quantity variance =(Standard usage in units - Actual usage in units) x Standard cost per unit
Standard usage in units = 2.7*370
999
Actual units
1,400
Standard cost per unit
$14
Ans
Material quantity variance =(1400-999)*14
($5,614)
Unfavourable
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