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13 January, 09:04

During March, Patt, Inc. purchases and uses 8,800 pounds of materials costing $35,640 to make 4,000 tiles. Patt's standard material cost per tile is $8 (2 pounds of material * $4.00).

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  1. 13 January, 12:45
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    Answer and Explanation:

    The computation is shown below:

    Total material cost variance

    = (Standard quantity * standard price) - (actual quantity * actual price)

    = (4,000 tiles * 2 pounds of material * $4) - (8,800 pounds * $35,640 : 8,800 pounds)

    = (8,000 pounds * $4) - ($8,800 pounds * $4.05)

    = $3,640 unfavorable

    For material price variance

    = Actual Quantity * (Standard Price - Actual Price)

    = 8,800 * ($4 - $4.05)

    = $440 unfavorable

    For material quantity variance

    = Standard Price * (Standard Quantity - Actual Quantity)

    = $4 * (8,000 pounds - 8,800 pounds)

    = $3,200 unfavorable

    The favorable variance is that in which the standard cost is more than the actual cost and the inverse goes to unfavorable variance
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