Secure ! https/ Exam 3 Chapters 10.13 9 The standards for product V28 call for 8

Question

Secure ! https/ Exam 3 Chapters 10.13 9 The standards for product V28 call for 8.4 pounds of a raw material that costs $19 20 per pound Last month, 2.300 pounds of the raw material were purchased for $43,700 The actual output of the month was 250 units of product V2B. A total of 2,200 pounds of the raw material were used to produce this output The direct materials purchases variance is computed when the materials are purchased 20 a. What is the materials price variance for the month? b What is the matenals quantity variance for the month? Indicate the effect of each variance by selecting "F"for favorable, "U" for unfavorable, and "None" for no effect (Le., zero t00variance) Input all amounts as positive velues) b Matenals quantity variance

Explanation / Answer

Answer to A

Answer to B

Direct Material Price Variance = (Standard Rate - Actual Rate) x Actual Quantity Purchased                                                              = ( 19.20 - 19.00) x 2300                                                              = 460 Fav Working Note Actual Material Price Per meter = Total Cost / total quantity                                                                  = 43700 / 2300                                                                  = 19 per pound

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