1) The following material standards have been established for a particular produ

Question

1) The following material standards have been established for a particular product: Standard quantity per unit of output... 6.8 Meters Standard Price...$14.40 per Meter

The following data pertain to operations concerning teh product for the last month:

Actual materials purchased... 4,400 meters

Actual cost of materials purchased... $60,500

Actual materials used in production...3,800 meters

Actual output...400 units

Q: What is the materials price variance for the month?

A:$14,850 U

B:$8,250 U

C:$8,640 U

D:$2,860 F

2) The following labor standards have been established for a particular product:

Standard labor-hours per unit of output... 5.0 hours

Standard labor rate... $19.85 per hour

The following data pertain to operations concerning the product for the last month:

Actual hours worked... 7,300 hours

Actual total hours cost...$148,190

Actual output... $1,400 units

Q:What is the labor efficiency variance for the month?

A:$5955 U

B:$9240 U

C:$9240 F

D:$6090 U

Explanation / Answer

Standard cost is $14.40 per meter Actual cost was ($60,500 / 4,400 ) = $ 13.75 per meter, so the variance is favorable. Materials price variance = AQ * (AP - SP) = 4,400 * ($13.75 - $14.40) = 4,400 * ( - $ 0.65 ) = - $2,860 The material price variance was $2,860 F AQ = Actual quantity purchased AP = Actual price SP = Standard price

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