The standard cost of Product B manufactured by Mateo Company includes three unit

Question

The standard cost of Product B manufactured by Mateo Company includes three units of direct materials at $5.00 per unit. During June, 28,000 units of direct materials are purchased at a cost of $4.70 per unit, and 28,000 units of direct materials are used to produce 9,000 units of Product B.Compute the total materials variance and the price and quantity variances.
Total materials variance $ UnfavorableFavorable
Materials price variance $ UnfavorableFavorable
Materials quantity variance $ UnfavorableFavorable







Repeat the question above, assuming the purchase price is $5.20 and the quantity purchased and used is 26,200 units.
Total materials variance $ UnfavorableFavorable
Materials price variance $ FavorableUnfavorable
Materials quantity variance $ FavorableUnfavorable

Explanation / Answer

Working: Total Material Variance  = -$1,240 Unfavorable Material Price Variance  = -$5,240 Unfavorable Material Quantity Variance  = $4,000 Favorable Working: Material Price Variance  = Actual Quantity * (Standard Price - Actual Price)  = 26200 * (5 - 5.2)  = 26200 * -0.2  = -$5,240 Unfavorable Material Quantity Variance  = (Actual Quantity - Standard Quantity) * Standard Price  = (26200 - 27000) * 5  = 800 * 5  = $4,000 Favorable Total Material Variance  = (Standard Quantity * Standard Price) - (Actual Quantity * Actual Price)  = (27000 * 5) - (26200 * 5.2)  = 135000 - 136240  = -$1,240 Unfavorable Please Rate 
Total Material Variance  = $3,400 Favorable Material Price Variance  = $8,400 Favorable Material Quantity Variance  = $5,000 Unfavorable Working: Material Price Variance: Material Price Variance  = Actual Quantity * (Standard Price - Actual Price)  = 28000 * ( 5 - 4.7)  = 28000 * 0.3  = $8,400 Favorable Material Quantity Variance: Actual Quantity for producing 9000 units of product "B"  = 28000 units Standard Quantity for producing 1 unit of product "B" 3 uints material  = 9000 * 3  = 27000 Material Quantity Variance  = (Actual Quantity - Standard Quantity) * Standard Price  = (28000 - 27000) * 5  = 1000 * 5 = $5,000 Unfavorable Total Material Variance  = (Standard Quantity * Standard Price) - (Actual Quantity * Actual Price)  = (27000 * 5) - (28000 * 4.7)  = 135000 - 131600 = $3,400 Favorable

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