Exam III ? eztornheducationcomihm tpx Apps 1 Hawkes Learning Blackboard LearnWel

Question

Exam III ? eztornheducationcomihm tpx Apps 1 Hawkes Learning Blackboard LearnWelcome my utrg Cinemark Theatres G Work in lapan Ga Amber Company produces iron table and chair sets. During October, Amber's costs were as follows Actual purchase price Actual direct labor rate Standard purchase price Standard quantity for sets produced Standard direct labor hours allowed Actual quantity purchased in October Actual direct labor hours Actual quantity used in October Direct labor rate variance $ 1.60 per lb S 6.80 per hour $1.40 per lb 900,000 lbs 15,000 10,000 $4,800 F 1,045,000 lbs 930,000 lbs. Required: 1. Calculate the total cost of purchases for October 2. Compute the direct materials price variance based on quantity purchased. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable.) ect Materials Price Variance O Type here to search 156 PM 4/15/201

Explanation / Answer

Answer of Part 1:

Total Purchases = Actual Quantity purchased In October * Actual Price
Total Purchases = 1,045,000* $1.60
Total Purchases = $1,672,000

Answer of Part 2:

Actual Cost = Actual Quantity * Actual Price
Actual Cost = 1,045,000 * $1.60
Actual Cost = $1,672,000

Standard Cost of Actual Quantity = Actual Quantity * Standard Price
Standard Actual quantity Cost = 1,045,000 * $1.40
Standard Cost of Actual Quantity= $1,463,000

Direct Material Price Variance = Actual Cost – Standard Cost of Actual Quantity
Direct Material Price Variance = $1,672,000 - $1,463,000
Direct Material Price Variance = $209,000 Unfavouable

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