J & C Electronics, Inc. gathered the following direct materials cost information

Question

J & C Electronics, Inc. gathered the following direct materials cost information for the month of March:

The direct materials inventory is:

$6,800F

$7,080U

$4,250F

$4,425U

The direct materials price variance is:

$11,865U

$12,145F

$4,250U

$4,425F

The direct materials usage variance is:

$6,800U

$7,080F

$4,425F

$4,250U

Actual quantity purchased 34,700 gallons Actual quantity used in production 33,900 gallons Actual price per gallon purchased $               8.50 Standard price per gallon $               8.85 Standard quantity allowed for actual production 34,400 gallons

Explanation / Answer

J & C Electronics Direct Material inventory at month end =34700-33900=                               800 gallons Direct Inventory cost @8.5 per gallon = $                 6,800.00 Direct material rate variance can be two types: Based On usage of material: Direct Materials Price Variance= Actual Qty Used( Actual Rate-Std Rate) =33900*(8.5-8.85)                         11,865 (F) Based on Purchase qty of material   Direct Materials Price Variance= Actual Qty purchased( Actual Rate-Std Rate) =34700*(8.5-8.85)=                         12,145 (F) Direct Material Efficiency Variance =Std Rate ( Actual Qty used-Std qty for actual output)   =8.85*(33900-34400)                           4,425 (F)

Related Questions

Navigate

• Browse (All)
• Browse J
• Subjects

---

---

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