Consider the following information for the Bordon Company for August: For fiscal

Question

Consider the following information for the Bordon Company for August: For fiscal 2018 the standard direct material cost for Borden's product is $50 per unit (12.5kg at $4 per kg). In August, 2018 the actual amount paid for 45,600kg of material purchased and used was $173,280 and the direct material usage variance was $15,200 unfavorable.

What was the actual production in August 2018?

a. 3344

b. 1670

c. 2435

d. 3430

Continuing with the Borden Company. What was the material price variance for the month of August?

a. $5080 fav

b. $9,120 unfav

c. $9,120 fav

d. $5,080 unfav

e. Insufficient data to answer the question

Explanation / Answer

Actual Rate 3.8 (173280/45600) Standard rate 4 Actual Quantity 45600 Material usage variance (AQ-SQ)*SR = -15200 (SQ-45600) = -3800 SQ   = 41800 Actual Production in unts 3344 (41800/12.5) Tthe actual production in August 2018: a. 3344 Material Price Variance (SR-AR)*AQ (4-3.8)*45600 9120 Favourable The material price variance for the month of August: c. $9,120 fav

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