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Safari File Edit View History Bookmarks Develop Window Help ezto.mheducation.com Question 6 (of 7) | Save & Exit l | Submit 4.00 points Problem 9-108 [LO 9-3] Regent Corp. uses a standard cost system to account for the costs of its one product. Materials standards are 3.0 pounds of material at $14 per pound, and labor standards are 3 hours of labor at a standard wage rate of $9. During July Regent Corp. produced 3,290 units. Materials purchased and used totaled 10,040 pounds at a total cost of $141,910. Payroll totaled $147,080 for 13,270 hours worked a. Calculate the direct materials price variance. (Do not round your intermediate calculations. Indicate the effect of variance by selecting "Favorable", "Unfavorable", or "None" for no effect (i.e, zero variance).) b. Calculate the direct materials quantity variance. (Indicate the effect of variance by selecting "Favorable", "Unfavorable", or "None" for no effect (i.e, zero variance).) 4 6

Explanation / Answer

Standard QTY pu = 3 pounds, Standard price per pound =$14

No of units manufactured = 3240 , standard quanty of materials required = 3240*3 = 9720 pounds

Actual QTY used = 10040 pounds, actual total price paid = $141,910(Actual Quantity*Actual Price)

Price per pound = $14.135

Direct material price variance = Actual Quantity*Standard Price - Actual Quantity*Actual Price

= 10040*$14 - $141,910 = $1350 (U)

Direct Material Quantity variance = Standard Quantity*Standard Price - Actual Quantity*Standard Price

= 9720*$14 - 10040*$14 = $4480(U)

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