Will thumbs up for correct answers, Thank you! E23-5 Compute materials price and

Question

Will thumbs up for correct answers, Thank you!

E23-5 Compute materials price and quantity variance The standard cost of Product B manufactured by Pharrell Company includes three units of direct materials at S5.00 per unit. During June, 29,000 units of direct materials are purchased at a cost of S4.70 per unit, and 29,000 units of direct materials are used to produce 9,400 units ot Instructions (a) Compute the total materials variance and the price and quantity variances. (b) Repeat (a), assuming the purchase price is S5.15 and the quantity purchased and used is 28,000 units NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?"

Explanation / Answer

SQ 28200 9400*3 SP 5 AQ 29000 AP 4.7 (A) Total Material Variance: ( AQ X AP ) Minus ( SQ X SP ) 29000 X 4.7 ) Minus ( 28200 X 5 ) 136300 Minus 141000 = -4700 favourable Material Price Variance: ( AQ X AP ) Minus ( AQ X SP ) 29000 X 4.7 ) Minus ( 29000 X 5 ) 136300 Minus 145000 = -8700 Favourable Material Quantity Variance: ( AQ X SP ) Minus ( SQ X SP ) 29000 X 5 ) Minus ( 28200 X 5 ) 145000 Minus 141000 = 4000 UnFavourable SQ 28200 9400*3 SP 5 AQ 28000 AP 5.15 (B) Total Material Variance: ( AQ X AP ) Minus ( SQ X SP ) 28000 X 5.15 ) Minus ( 28200 X 5 ) 144200 Minus 141000 = 3200 Unfavourable Material Price Variance: ( AQ X AP ) Minus ( AQ X SP ) 28000 X 5.15 ) Minus ( 28000 X 5 ) 144200 Minus 140000 = 4200 Unfavourable Material Quantity Variance: ( AQ X SP ) Minus ( SQ X SP ) 28000 X 5 ) Minus ( 28200 X 5 ) 140000 Minus 141000 = -1000 Favourable

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