Exercise E11-6 Calculating Material Variances Crown Jewelry produced 1,500 rings

Question

Exercise   E11-6 Calculating Material Variances Crown   Jewelry produced 1,500 rings during March.   The standard cost of each ounce of gold used in a ring is $330 per ounce. The   standard quantity of material for each ring is a half ounce of gold per ring.   The cost of   gold purchased and used in March was $224,000 at $350 per ounce. Determine   the material   price variance and the material quantity variance for March. Indicate whether   each variance is favorable or   unfavorable. Material Price   Variance = =     ( Amount - Amount )          * Number = Formula Fav / Unf Material Quantity   Variance = =     ( Number - Number )          * Amount = Formula Fav / Unf Exercise   E11-6 Calculating Material Variances Crown   Jewelry produced 1,500 rings during March.   The standard cost of each ounce of gold used in a ring is $330 per ounce. The   standard quantity of material for each ring is a half ounce of gold per ring.   The cost of   gold purchased and used in March was $224,000 at $350 per ounce. Determine   the material   price variance and the material quantity variance for March. Indicate whether   each variance is favorable or   unfavorable. Material Price   Variance = =     ( Amount - Amount )          * Number = Formula Fav / Unf Material Quantity   Variance = =     ( Number - Number )          * Amount = Formula Fav / Unf

Explanation / Answer

Material Price Variance = = ( 350 - 330 ) * 640 = 12800 Fav Material Quantity Variance = = ( 750 - 640 ) * 350 = 38500 Fav

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