The standard cost of Product B manufactured by Pharrell Company includes 2.0 uni
ID: 2473740 • Letter: T
Question
The standard cost of Product B manufactured by Pharrell Company includes 2.0 units of direct materials at $6.9 per unit. During June, 27,500 units of direct materials are purchased at a cost of $6.85 per unit, and 27,500 units of direct materials are used to produce 13,700 units of Product B. (a) Compute the total materials variance and the price and quantity variances. Total materials variance $ Materials price variance $ Materials quantity variance $ (b) Compute the total materials variance and the price and quantity variances, assuming the purchase price is $6.95 and the quantity purchased and used is 26,500 units. Total materials variance $ Materials price variance $ Materials quantity variance $
Explanation / Answer
SQSP AQSP AQAP
27,400 x 6.9 27,500 x 6.9 27,500 x 6.85
= 189,060 = 189,750 = 188,375
SP = Standard price = 6.9
SQ = Standard Quantity for actual production = 2 x 13,700 = 27,400
AP= Actual price = $ 6.85
AQ = Actual Quantity used = 27,500
SQSP AQSP AQAP
27,400 x 6.9 26,500 x 6.9 26,500 x 6.95
=189,060 = 182,850 = 184,175
AP = Actual price = $ 6.95
AQ = Actual Quantity used = 26,500
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