The following data relate to the direct materials cost for the production of 1,900 automobile...
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Accounting
The following data relate to the direct materials cost for the production of 1,900 automobile tires:
Actual:
60,800 lb. at $2.05
Standard:
59,600 lb. at $2.00
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.
Price variance
$fill in the blank 1
FavorableUnfavorable
Quantity variance
$fill in the blank 3
FavorableUnfavorable
Total direct materials cost variance
$fill in the blank 5
FavorableUnfavorable
b. The direct materials price variance should normally be reported to the
Plant ManagerPurchasing Department
. If lower amounts of direct materials had been used because of production efficiencies, the variance would be reported to the
Purchasing DepartmentProduction Supervisor
. If the favorable use of raw materials had been caused by the purchase of higher-quality raw materials, the variance should be reported to the
Purchasing DepartmentProduction Supervisor
.
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