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Hart Company made 4,900 bookshelves using 22,000...
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Hart Company made 4,900 bookshelves using 22,000 board feet of woodcosting $261,800. The company's direct materials standards for onebookshelf are 5 board feet of wood at $11.80 per board foot.
(1) Compute the direct materials price andquantity variances incurred in manufacturing thesebookshelves.
AQ = Actual Quantity SQ = Standard Quantity AP = Actual Price SP = Standard Price
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Ans:
1) Direct Material Price Variance=Actual Quantity*(Standard
price-Actual price)
=22,000($11.80-$11.9)
=$2,200 un favorable
Note:
Actual price = Actual Material cost/Actual Quantity
=$261,800/22,000
=$11.90
2) Direct Material Quantity Variance=Standard price*(Standard
Quantity-Actual Quantity)
=$11.8*(24,500-22,000)
=$29,500
Favorable
Standard quantity=Actual production*standard quantity required
per unit
=4,900*5=24,500
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