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Rama09 [41]
3 years ago
14

cost variance Tercer reports the following for one of its products. Direct materials standard (4 lbs. @ $2 per lb.) $ 8 per fini

shed unit Actual finished units produced 60,000 units Actual cost of direct materials used $ 535,000 Compute the total direct materials cost variance and classify it as favorable or unfavorable.
Business
1 answer:
maksim [4K]3 years ago
8 0

Answer:

Total direct materials cost variance is $66,000 and it is favorable.

Explanation:

Actual cost = Actual Quantity × Actual Price

= 300,000  × $1.78

= $534,000

Actual cost with selling price = Actual Quantity  × Selling Price

= 300,000  × $2.00

= $600,000

The total direct materials cost variance is computed as:

Total direct materials cost variance = Actual cost with selling price - Actual Cost

= $600,000 - $534,000

= $66,000

It is favorable.

Working Note:

Actual Price per lbs = $534,000 / 300,000

= $1.78

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Copy Testing

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3 years ago
The first known application of marketing research to a business marketing/advertising problem was conducted by:
ehidna [41]

Answer:

An advertising agency.

Explanation:

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3 years ago
Cool Beans is a locally owned coffeeshop that competes with two large coffee chains, PlanetEuro and Frothies. Alicia, the owner,
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Answer:

0.9717 per unit sold (approx)

Explanation:

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5 0
3 years ago
Pierce Corporation exchanged old equipment for new equipment. The original cost of the old equipment was $120,000, and its accum
ololo11 [35]

Answer:

new equipment                   50,000 debit

accumulated depreciation  40,000 debit

loss at disposal:                   30,000 debit

                   old equipment               120,000 credit

--to record trade of equipment--

Explanation:

Let's break the transactions into small parts:

We need to remove the old equipment from accounting along with their accumulated depreciation so:

accumulated depreciation 40,000 debit

                   old equipment               120,000 credit

Then, we debit the new equipment at fair value:

new equipment 50,000 debit

Last, assuming the trade has commercial substance: we recognize the gain or loss on sale:

book value of traded equipment: 80,000

fair value of new equipment:         50,000

loss at disposal:                              30,000

<u>Thus, the journal entry will be as follows:</u>

new equipment                   50,000 debit

accumulated depreciation  40,000 debit

loss at disposal:                   30,000 debit

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3 0
3 years ago
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