The standard cost of Product B manufactored by Pharell company includes 2.0 unit

Question

The standard cost of Product B manufactored by Pharell company includes 2.0 units of direct materials at $6.9 per unit. During june 27,500 units of direct materials are purchased at a cost of $6.85 per unit, 27500 units of direct materials are used to produce 13700 units of product B.

Total materials variance $_________   Favorable
Materials price variance $________ Favorable
Materials Quanitity variance $___________ Unfavorable

Compute the total materials variance and the price and quantities variances, assuming the purchase is $6.95 and the quantity pruchased and and used is 26500 units.
Total materials variance$ _________ Favorable
Materials price variance $ _________ Unfavorable
Materials quanitity variance $_________ Favorable

Explanation / Answer

1) total material variance (27500*6.85) - (13700*2*6.90) 685 F Materials price variance (Actual price - standard price)*AQ purchased (6.85 - 6.90)*27,500 1375 F Materials Efficiency variance (Actual qty used - std qty allowed)*Standard rate (27,500 - 13700*2)*6.90 690 U 2) total material variance (26500*6.95) - (13700*2*6.90) 4885 F Materials price variance (Actual price - standard price)*AQ purchased (6.95 - 6.90)*26,500 1325 U Materials Efficiency variance (Actual qty used - std qty allowed)*Standard rate (26,500 - 13700*2)*6.90 6,210 F

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