Computation and interpretation of materials variances; Materials variances recor

Question

Computation and interpretation of materials variances; Materials variances recorded and closed LO P2, P5

Hart Company made 4,100 bookshelves using 23,000 board feet of wood costing $255,300. The company's direct materials standards for one bookshelf are 6 board feet of wood at $11.00 per board foot.

Compute the direct materials price and quantity variances incurred in manufacturing these bookshelves.

Hart Company made 4,100 bookshelves using 23,000 board feet of wood costing $255,300. The company's direct materials standards for one bookshelf are 6 board feet of wood at $11.00 per board foot.

Compute the direct materials price and quantity variances incurred in manufacturing these bookshelves.

Explanation / Answer

direct materials price variance= (actual cost- standard cost)*actual quantity

actual cost=255300/23000=11.1

direct materials price variance=11.1-11.00=0.10

23000*0.10=2300

materials quantity variance=(standard quantity-actual quantity)standard price

standard quantity=4100*6=24600

materials quantity variance=(24600-23000)11=17600

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.