Hailey owns a fruit smoothie shop at the local mall. Each smoothie requires 1/2

Question

Hailey owns a fruit smoothie shop at the local mall. Each smoothie requires 1/2 pound of mixed berries which are expected to cost $4 per pound during the summer ma Duin the monuneurchased and used 2615 pounds of mied beries at a costof $3 85 per pound Haleys shop soid 5,100 smoothies cburin the month. . Calculate the DM price variance. Is the variance favorable or unfavorable? 2. Calculate the DM efficiency variance. Is the variance favorable or unfavorable? 3. Calculate the total DM variance. Is the variance favorable or unfavorable? 1. Calculate the DM pie variance. ls he varcfaable or unfavorable? Begin by determining the formula for the price variance, then compute the price variance for the direct materials. (Enter the variance as a positive number. Enter currency amounts in the formula to the nearest cent and then round the final variance amount to the nearest whole dollar. Label the variance as favorable (F) or unfavorable (U). Abbreviations used: DM Direct materials) DM price variance x ( x ( 2. Calculate the DM efficiency variance. Is the variance favorable or unfavorable? Determine the formula for the quantity variance, then compute the quantity variance for the direct materials. (Enter the variance as a positive number. Enter currency amounts in the formula to the nearest cent and then round the final variance amount to the nearest whole dollar. Label the variance as favorable (F) or unfavorable

Explanation / Answer

Std Material Quantity per unit of Output: 0.50 pounds Std material Quantity allowed for actual output (5100 *0.50): 2550 pounds Std price per pound: $ 4.00 per pound Actual Quantity used: 2615 pounds Actual price per pound: $ 3.85 per pound Material Price Variance: Actual Quantity   *     ( Std price per pound    - Actual Pound per pound)    = Material Price variance 2615 pounds   * ( 4.00      - 3.85   )     = $ 392.25 Favorable Material Price variance: $ 392.25 Favorable Material Efficiency Variance: Std price per pound * ( Standard qty      - Actual Quantity ) = Material Efficiency Variance 4.00 * (2550 pounds       - 2615 pounds )      = $ 260 unfavorable Material Efficiency variance: $ 260 Unfavorable Total Material variance: Material price variance: 392.25 F material Efficiency Variance: 260 U Total Material variance: 132.25 Fav Total Material variance: $ 132.25 favorable

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