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12345 [234]
3 years ago
6

Balt Company maintains a standard cost system; as such, all inventories, including materials, are carried on the books at standa

rd cost. Last period, Balt used 6,000 pounds of Material H to produce 800 units of Product C8. The company has established a standard of 7 pounds of Material H per unit of C8, at a price of $7.50 per pound of material. During the period, Balt purchased 3,000 pounds of Material H. The company spent $20,000 during the period to purchase material H. Required: 1. Calculate the direct materials purchase-price variance for the period, rounded to the nearest dollar. 2. Calculate the direct materials usage variance for the period, rounded to the nearest whole dollar.
Business
1 answer:
g100num [7]3 years ago
5 0

Answer:

1. Purchase price variance = $2,490 Favorable

2. Direct Material Usage Variance = $3,000 Unfavorable

Explanation:

Provided information, we have

Standard Material per unit = 7 pounds

Actual Units produced = 800 units

Standard units = 800 \times 7 = 5,600 pounds

Actual units = 6,000 pounds

Standard Price per pound = $7.50

Actual price = \frac{20,000}{3,000} = $6.67

1. Purchase price variance = (Standard Price - Actual Price) \times Actual Quantity Purchased

= ($7.50 - $6.67) \times 3,000 = $2,490 Favorable

As the price at which units are purchased is less than standard, the variance is favorable.

2. Direct Material Usage Variance = ( Standard Quantity - Actual Quantity) \times Standard Rate

= (5,600 - 6,000) \times $7.50

= - $3,000 Unfavorable

As we can see, the actual quantity used is higher than the standard quantity, therefore the variance is unfavorable.

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Before prorating the manufacturing overhead costs at the end of 2020, the Cost of Goods Sold and Finished Goods Inventory accoun
stiks02 [169]

Answer:

COGS will decrease by 2,597 dollars as will decrease by the proration of the factory overhead

Explanation:

we do cross mutiplication to solve for the COGS and FG based on actual overhead

           <em>  applied                actual</em>

<em>COGS</em>     57,500               54,903     *A

<em>FG</em>      <u>    20,000   </u>          <u>   19,067  </u>   *B

<em>Total</em>       77, 500               74,000

*A)   57,500 x  74,000/77,500 = 54,903

*B)   20,000 x 74,000/77,500 =  19,097

Decrease in COGS 57,500 - 54,903 = 2,597

3 0
3 years ago
What is a<br> purpose of drawing up budgets in a business
storchak [24]
To estimate the amount of money needed so you don't run out.
4 0
3 years ago
Mr. musselman is the head coach of the high school football team. he notices that, after learning the names of the players on th
insens350 [35]
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6 0
3 years ago
The cost, in dollars, to produce x designer dog leashes is C ( x ) = 8 x + 3 , and the price-demand function, in dollars per lea
Rzqust [24]

Answer:

Profit maximising price = 48

Explanation:

Total Cost : C (x) = 8x + 3

Demand Curve : p (x) = 88 − 2x

Total Revenue = p (x). x  =  x (88 - 2x) = 88x - 2x^2

Profit maximisation is where Marginal Cost (MC) = Marginal Revenue (MR)

MC = d TC / d Q  =   d (8x + 3) / d x = 8

MR = d TR / d Q = d (88x - 2x^2) / d x = 88 - 4x

Equating MR & MC ,

88 - 4x = 8  , 88 - 8 = 4x

x = 80 / 4 , x = 20

Putting value in demand curve,

p = 88 - 2x = 88 - 2 (20) = 88 - 40

p = 48

3 0
3 years ago
Sole Purpose Shoe Company is owned and operated by Sarah Charles. The company manufactures casual shoes, with manufacturing faci
grandymaker [24]

Answer:

Sole Purpose Shoe Company

The reason for Sarah to want to use standard costs to compare with her actual costs is:

A) Management can evaluate the differences between standard costs and actual costs to focus on correcting the cost variances.

Explanation:

Standard costs provide a control technique for evaluating the Sole Purpose Shoe Company's performance at three levels: a standard performance level, a measure of actual performance, and a measure of the difference (variance) between standard and actual costs.  Sarah will use the variance resulting from the comparison of standard costs with actual costs to measure the non-financial performance of the entity.

7 0
3 years ago
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