Computing Materials Variances D-List Calendar Co. specializes in manufacturing c

Question

Computing Materials Variances D-List Calendar Co. specializes in manufacturing calendars that depict obscure comedians. The company uses a standard cost system to control its costs. During one month of operations, the direct materials costs and the quantities of paper used showed the following $.175 per page Actual purchase price. Standard quantity allowed for production..... 170,000 pages Actual quantity purchased during month. . . . . . . . . . . . . . . . . 20.000 pages Actual quantity used during month Standard price per page. 185,000 pages $.17 per page Calculate tha following: Use , and "U" to designate favorable and unfavorable variances. Enter all amounts as positive numbers. 1. Total cost of purchases for the month 2. Materials purchase price variance 3. Materials quantity varlance 4. Net materials varlance 35000

Explanation / Answer

2.material purchase price variance = actual quantity used *(actual price - standard price)

=>185,000 * (0.175 - 0.17)

=>$925(U)....

net materials variance = materials purchase price variance + materials quantity variance

=>$925 (U) + $2550 (U)

=>$3,475 (U).

the following is the required table:

1.Total cost of purchases for the month $35,000 2.materials purchase price variance $925 U 3.Materials quantity variance $2550 U 4 Net materials variance $3475 U

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