Ask Question
30 August, 12:45

Direct Materials Variances The following data relate to the direct materials cost for the production of 2,300 automobile tires: Actual: 52,400 lbs. at $1.7 per lb. Standard: 53,400 lbs. at $1.75 per lb. a. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Direct Materials Price Variance $ Direct Materials Quantity Variance $ Total Direct Materials Cost Variance $ b. The direct materials price variance should normally be reported to the. When lower amounts of direct materials are used because of production efficiencies, the variance would be reported to the. When the favorable use of raw materials is caused by the purchase of higher-quality raw materials, the variance should be reported to the

+1
Answers (1)
  1. 30 August, 14:46
    0
    Direct Material Price Variance = (Ap - Sp) * AQ

    ($1.70 - $1.75) * 52,400 = (-0.05) * 52,400 = - $2,620 Favorable

    Direct Material Quantity Variance = (Aq - Sq) * Sp

    (52,400 - 53,400) $1.75 = - $1,750 Favorable

    Total materials cost variance = Material price variance + Material quantity variance

    = - $2,260 (f) + - $1,750 (f)

    =-$4,010 (F)

    Explanation:

    Ap = Actual Price

    Sp = Standard Price

    Aq = Actual Quantity

    Sq = Standard Quantity

    F = Favorable
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Direct Materials Variances The following data relate to the direct materials cost for the production of 2,300 automobile tires: Actual: ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers