#22 The Acme Company produces harmonicas for distribution on an international sc

Question

#22

The Acme Company produces harmonicas for distribution on an international scale. Standards for a particular harmonica are:

Materials: 10 ounces per unit at .54¢ per ounce.

Labor: 1 hours per unit at $2.55 per hour.

During the month of December, the company produced 500 units. Information for the month follows:

Materials: 14,800 ounces were purchased and used at a total cost of $5,940.

Labor: 2,400 hours worked at a total cost of $8,000.

The materials price variance is (round your intermediate calculations to 2 decimal places):

a. $1,792 F

b. $2,072 F

c. $1,792 U

d. $2,072 U

Explanation / Answer

=5940/14800=.40 Per Ounce Price Variance =(.54-.40)*14800 Units=1792F favorable

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