What is the materials price variance for the month? (Input the amount as a posit
ID: 2482576 • Letter: W
Question
What is the materials price variance for the month? (Input the amount as a positive value. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.)
What is the materials quantity variance for the month? (Input the amount a as positive value. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.)
Explanation / Answer
Quantity Price Cost Standard cost per unit of output 4.7 gram 13.00 per gram 61.10 Standard to produce actual output of 550 units 2585 grams 13.00 per gram 33605 Quantity Price Cost Actual Material purchase 3600 11.65 per gram 41940 Actual Material produced 2900 11.65 per gram 33785 A) Material price variance It measures change in total cost on account of change in purhase price = Actual quantity ( Actual price - standard price) = 3600 ( 11.65 - 13.00) = -4860, or it can be said as = 4860 Favourable b) Material quantity variance it is calculated for actual material used in production It measures change in total cost on account of change in quantity used in production = Standard price ( actual quantity consumed - standard quantity for actual production) = 13 (2900-2585) = 4095 Unfavourable
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