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3 years ago

Computing materials variances:

Business

1 answer:

lesantik [10]3 years ago

3 0

Answer:

1. Total cost of purchases for the month

= actual purchases x actual price = 200,000 pages x $0.175 per page = $35,000

2. Materials price variance

= (actual unit cost - standard unit cost) x actual quantity used = ($0.175 - $0.17) x 185,000 = $925 unfavorable

3. Materials quantity variance

= (actual quantity used - standard quantity allowed) x standard price = (185,000 - 170,000) x $0.17 = $2,550 unfavorable

4. Net materials variance

= materials price variance + materials quantity variance = $925 + $2,550 = $3,475 unfavorable

Explanation:

Actual purchase price $0.175 per page

Standard quantity allowed for production 170,000 pages

Actual quantity purchased during month 200,000 pages

Actual quantity used during month 185,000 pages

Standard price per page $0.17 per page

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