Warner, Inc., produces Product Y. Each unit required 1 yard of material. The com

Question

Warner, Inc., produces Product Y. Each unit required 1 yard of material. The company produced 470 units during October. However, due to defects in the fabric, the company actually used 400 yards of material during October. Each yard has a standard price of $6.40. The company purchased 490 yards for October production at a cost of $2,865. Determine the price variance, quantity variance, and total direct materials cost variance for October. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Round your per unit computations to nearest cent, if required.

Explanation / Answer

Particulars Standard Actual Qty Rate amount Qty Rate amount Materials                  470.00                      6.40              3,008.00                  490.00                  5.8469              2,865.00 Actual output                  470.00 Materials reqd(470*1)                  470.00 DMPV = (SP-AP)*AQ DMPV = (6.40- 5.8469)490 DMPV = 271 F DMQV= (SQ-AQ)SP DMQV= (470 - 490)6.40 DMQV= 128 U DMCV = Standard Cost - Actual Cost DMCV = 3,008 - 2865 DMCV = 143 F

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