What is the actual cost per gram of the special alloy that World Class RingsWorl

Question

What is the actual cost per gram of the special alloy that World Class RingsWorld Class Rings purchased last month? 2. What is the direct material price variance? 3. What is the direct material quantity variance? 4. How might the direct material price variance for the company last month be causing the direct material quantity variance? produces class rings. Its best-selling model has a direct materials standard of 1616 grams of a special alloy per ring. This special alloy has a standard cost of $ 63.30$63.30 per gram. In the past month, the company purchased 16 comma 80016,800 grams of this alloy at a total cost of $ 1 comma 061 comma 760$1,061,760. A total of 16 comma 30016,300 grams were used last month to produce 1 comma 0001,000 rings.

Explanation / Answer

1. Actual cost per gram of alloy $63.20 2. Direct material price variance (SP-AP)*AQ 1680 Favourable 3. Direct material quantity variance (SQ - AQ)*SP -5040 5040 Unfavourable

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