Your answer is partially correct. Try again. The standard cost of Product 8 manu

Question

Your answer is partially correct. Try again. The standard cost of Product 8 manufactured by Pharrell Company includes 3.7 units of direct materials at $6.8 per unit. During June, 26,600 units of direct materials are purchased at a cost of $6.70 per unit, and 26,600 units of direct materials are used to produce 7,100 units of Product B. Compute the total materials variance and the price and quantity variances Total materials variance Materials price variance Materials quantity variance $12244 Unfavorablel 16 Favorabl Favorable Compute the total materials variance and the price and quantity variances, assurming the purchase price is $6.90 and the quantity purchased and used is 27,000 units. Total materials variance 2700 Unfavorable Materials price variance nfavorable nfavorable Question Attempts: 2 of 3 used

Explanation / Answer

Answer to Part b:

Total Materials Variance = (AP * AQ) – (SP * SQ)
Standard Quantity = 7,100 * 3.7 = 26,270 units
Total Materials Variance = (6.90 * 27,000) – (6.80 * 26,270)
Total Materials Variance = 186,300 – 178,636
Total Materials Variance = 7,664 (Unfavourable)

Material Price Variance = (AP – SP) * AQ
Material Price Variance = (6.90 – 6.80) * 27,000
Material Price Variance = 2,700 (Unfavourable)

Materials Quantity Variance = (AQ – SQ) * SP
Materials Quantity Variance = (27,000 – 26,270) * $6.80
Materials Quantity Variance = 4,964 (Unfavourable)

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