Just need to find the price and quantity variance. 32. Throop Company\'s standar

Question

Just need to find the price and quantity variance.

32. Throop Company's standards call for one kilogram of materials for each unit of output at a cost of S2 per kilogram for the raw materials. Actual output was 50,000 units of product requiring 45,000 kilograms of raw materials at a cost of $2.10 per kilogram. There were no beginning or ending inventories of raw materials. The direct material price variance and quantity variance were A) B) C) D) Price Quantity $ 4,500 unfavorable $10,000 favorable S 5,000 favorable $10,500 unfavorable $ 5,000 unfavorable S10,500 favorable $10,000 favorable S 4,500 unfavorable

Explanation / Answer

Answer A

Standard Price (SP) = $2/Kg

Standard Quantity (SQ) = 50,000 kg

Actual Price (AP) = $2.1

Actual Quantity (AQ) = 45,000 kg

Standard quantity will be 50,000 kg as 1 kg is required to produce 1 unit and 50,000 units are produced.

Actual used = 45,000 Kg.

Direct Material Price Variance = (SP – AP) * AQ

= ($2- $2.1) * 45,000 kg

= $(4,500)

Unfavorable $4,500

Direct Material Quantity Variance = (SQ – AQ) * SP

= (50,000 kg – 45,000 kg) * $2 per kg

= $10,000

Favorable $10,000

Related Questions

Navigate

• Browse (All)
• Browse J
• Subjects

---

---

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