Answer:
1. Standard quantity of kilograms
= 0.67 kg x 3,800
= 2,546 kg
2. Standard material cost allowed to make 3,800 helmets
= 0.67 x $7 x 3,800
= $17,822
3. Material spending variance $
Standard material cost 17,822
Less: Actual material cost 18,308
486(U)
4. Material price variance
= (Standard price - Actual price) x Actual quantity purchased
= ($7 - $6.599855804) x 2774 kg
= $1,110(F)
Actual price
= Actual material cost
Actual quantity purchased
= $18,308
2,774 kg
= $6.599855804
Material usage variance
= (Standard quantity - Actual quantity used) x Standard price
= (2,546 - 2,774) x $7
= $1,596(U)
Explanation:
Material spending variance is the difference between standard material cost and actual material cost. Material price variance is the difference between standard price and actual price multiplied by actual quantity purchased. Material usage variance is the difference between standard quantity and actual quantity used multiplied by standard price. Actual price is actual material cost divided by actual quantity purchased. Standard quantity is calculated as standard quantity per unit multiplied by actual output.
