70.2K

Verified Solution

Link Copied!

Problem B: During December, a department completed 2,500 units of a product that has a standard materials usage and cost of 1.2 square feet per unit at $0.48 per square foot. The actual material used consisted of 3,050 square feet at an actual cost of $2,664.48. The actual purchase of this material amounted to 4,500 square feet at a total cost of $3,931.20. Requirement: Compute the Materials Price Variance, the Materials (Quantity) Usage Variance and the Total Materials Variance. Also indicate whether the variances are Favorable or Unfavorable. 5 - 3 22 points AQ- SQ AP SP 0 1 Actual Quantity in sq. ft. Standard Quantity in sq. ft. Actual Price per sq. ft. (AP = Actual Purchase Cost of Materials/Number of square feet purchased) Standard Price per sq. ft. Do not round the Acutal Price per sq. Ft. or the total will not compute correctly. This should be 4 decimal places. Material Price Variance = (Actual Quantity Purchased x Actual Price) - (Actual Quantity Purchased x Standard Price) 2 3 4 5 AQ AP AQ SP 6 per sq. ft. per sq. ft. 8 Materials Price Variance = (Make sure all variance amounts are positive) 0 1 2 Material (Quantity) Usage Variance = (Actual Quantity Used x Standard Price) - (Standard Quantityx Standard Price) 3 AQ SP SQ X SP 4 5 X per sq. ft. X per sq. ft. 6 Materials (Qty) Usage Variance = (Make sure all variance amounts are positive) 7 8 9 0 1 2 Total Material Variance = Direct Materials Variance +or - Material (Quantity) Usage Variance (Hint: If both Variances are favorable or Unfavorable then you add them together and the Total Variance will be Favorable or Unfavorable.) (If one is Favorable and the other is Unfavorable you will subtract the 2 and the Total Variance will take on the Favorable or Unfavorable trait of the largest variance) 3 A Total Material Variance = Direct Materials Variance + or - Material (Quantity) Usage Variance (Hint: If both Variances are Favorable or Unfavorable then you add them together and the Total Variance will be Favorable or Unfavorable.) (If one is favorable and the other is Unfavorable you will subtract the 2 and the Total Variance will take on the Favorable or Unfavorable trait of the largest variance) Materials Price Variance = Materials (Qty) Usage Variance = Total Materials Variance = (Make sure all variance amounts are positive) Formula Bar

Answer & Explanation Solved by verified expert

See Answer