Norio Manufacturing uses powdered plastics (PPS) to manufacture a high-pressure

Question

Norio Manufacturing uses powdered plastics (PPS) to manufacture a high-pressure board used in digital equipment, Flex 10. Information concerning its operation in June is as follows: Budgeted units of Flex 10 for June 4,900 Budgeted usage of FPS 44,200 pounds Number of units of Flex 10 manufactured 4,000 PFS purchased 42,710 pounds PFS used 38,600 pounds Total actual cost of FPS used $227,228 Direct materials usage variance - unfavorable $21,290 The cost of PPS in the flexible budget for the number of units manufactured this period is: A) $277,500 B) $326,320 C) $305,030 D) $227,228 E) $251,422 Norio Manufacturing uses powdered plastics (PPS) to manufacture a high-pressure board used in digital equipment, Flex 10. Information concerning its operation in June is as follows: Budgeted units of Flex 10 for June 4,900 Budgeted usage of FPS 44,200 pounds Number of units of Flex 10 manufactured 4,000 PFS purchased 42,710 pounds PFS used 38,600 pounds Total actual cost of FPS used $227,228 Direct materials usage variance - unfavorable $21,290 The cost of PPS in the flexible budget for the number of units manufactured this period is: A) $277,500 B) $326,320 C) $305,030 D) $227,228 E) $251,422

Explanation / Answer

Standard quantity allowed = 44200*4000/4900=36082

MAterial usage variance = SR [AQ-SQ]

21290 = SR [38600 -36082]

21290 =SR * 2518

SR = 21290 /2518

    =$ 8.4551

Standard cost in flexible budget = 8.4551* 36082 =$ 305077

correct option "C" 305030   [approx to 305077 ,difference due to decimal places]

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