MyTime, Inc., produces electronic timepieces. The company uses mini-LCD displays
ID: 2374930 • Letter: M
Question
MyTime, Inc., produces electronic timepieces. The company uses mini-LCD displays for its products. Each timepiece uses one display. The company produced 540 timepieces during October. However, due to LCD defects, the company actually used 570 LCD displays during October. Each display has a standard cost of $8.60. Five hundred seventy LCD displays were purchased for October production at a cost of $4,560.
Determine the price variance, quantity variance, and total direct materials cost variance for October. Use the minus sign to enter favorable variances as negative numbers.
Price variance: $ SelectFavorable VarianceUnfavorable VarianceItem 2 Quantity variance: $ SelectFavorable VarianceUnfavorable VarianceItem 4 Total direct materials cost variance: $ SelectFavorable VarianceUnfavorable VarianceItem 6Explanation / Answer
price variance = 570*8.60 - 4560 = -342 Favorable
quantity variance, = (540-570)*8.60 = $258 Unfavorable
total direct materials cost variance = 540*8.60 - 4560 = -84 Favorable
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