Question

Bowie Sporting Goods manufactures sleeping bags. The manufacturing standards per sleeping bag, based on 5,000 sleeping bags per month, are as follows: Direct material of 4.00 yards at $5.50 per yard Direct labor of 2.00 hours at $19.00 per hour Overhead applied per sleeping bag at $18.00 In the month of April, the company actually produced 5,200 sleeping bags using 27,300 yards of material at a cost of $6.10 per yard. The labor used was 11,700 hours at an average rate of $20.50 per hour. The actual overhead spending was $96,200. Determine the total materials variance and round to the nearest whole dollar. Enter a favorable variance as a negative number. Enter an unfavorable variance as a positive number.

Answer 1

Answer:

Total Material Variance = $52,130 Unfavorable

Explanation:

Total Material Variance = Actual Cost - Standard Cost

Total Material Variance = Direct Material Price Variance + Direct Material Usage Variance.

But here, we will calculate straight, therefore

Standard cost for 5,200 sleeping bags

= 5,200 $\times$ 4 $\times$ $5.50 = $114,400

Actual Cost = 27,300 $\times$ $6.10 = $166,530

Total Material Variance = $166,530 -  $114,400 = $52,130 Unfavorable

As this is the positive, as also Actual cost is higher than standard therefore, this is unfavorable.