Secure https://newconnect.mheducation.com/flow/connect.htm CH 21 0 Required Info

ID: 2572787 • Letter: S

Question

Secure https://newconnect.mheducation.com/flow/connect.htm CH 21 0 Required Information Use the following Informeuion for the Exercises below The following information applies to the questions displayed below] Hart Company made 4,000 bookshelves using 27,000 board feet of wood costing $297,000. The company's direct materials standards for one bookshelf are 8 board feet of wood at $10.90 per board foot Exercise 21-13 Computation and Interpretation of materials varlances LO P2 Compute the direct materials price ..d quantity variances incurred in mantecturing these bookshelves. AQ Actual Quantity SO Standard Quantity AP . Actual Price SP Standard Price Reference inks

Explanation / Answer

Solution:

Amount

Working

Actual Cost

297000

Actual Quantity

27,000

Actual Price

297000/27000

Standard Price

10.9

Standard Quantity

32000

Standard Cost

348800

32000*10.9

Direct Cost Variance (DCV) = Standard Cost - Actual Cost

=348800 - 297000 = 51,800 F

Direct Price Variance (DPV) = (Standard Price - Actual Price) * Actual Quantity

= (10.9-11) * 27,000 = 2,700 U

Direct Quantity Variance (DQV) = (Standard Quantity - Actual Quantity) * Standard Price

= (32,000 -27000) * 10.9 = 54,500 F