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

(1). Direct material price variance = $392.25 F

Explanation;

Formula of direct material price variance = (Actual price – Standard price) * Actual quantity used

Actual price is given = $3.85 per pound

Standard price is given = $4 per pound

Actual quantity used is given = 2615 pound

Now let’s put the values in given formula;

Direct material price variance = ($3.85 – $4) * 2615

Direct material price variance = $392.25 F

(2). Direct material efficiency variance = 260 U

Explanation;

Formula of direct material efficiency variance = (Actual quantity – Standard quantity) * Standard price

Standard price is given = $4 per pound

Actual quantity used is given = 2615 pound

Standard quantity will be (5100 * ½) = 2550 pounds

Now let’s put the values in given formula;

Direct material efficiency variance = (2615 – 2550) * $4

Direct material efficiency variance = 260 U

(3). Total direct material variance = $132.25 F

Explanation;

Formula of Total direct material variance = (Actual quantity * Actual price) – (Standard quantity * Standard price)

Standard price is given = $4 per pound

Actual quantity used is given = 2615 pound

Actual price is given = $3.85

Standard quantity will be (5100 * ½) = 2550 pounds

Now let’s put the values in given formula;

Total direct material variance = (2615 * $3.85) – (2550 * $4)

Total direct material variance ($10067.75 – $10200) = $132.25 F

Related Questions

Navigate

• Browse (All)
• Browse H
• Subjects

---

---

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