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Furkat [3]
3 years ago
14

Calculating the Direct Materials Price Variance and the Direct Materials Usage Variance Guillermo's Oil and Lube Company is a se

rvice company that offers oil changes and lubrication for automobiles and light trucks. On average, Guillermo has found that a typical oil change takes 24 minutes and 6.2 quarts of oil are used. In June, Guillermo's Oil and Lube had 980 oil changes. Guillermo's Oil and Lube Company provided the following information for the production of oil changes during the month of June: Actual number of oil changes performed: 980 Actual number of quarts of oil used: 6,020 quarts Actual price paid per quart of oil: $5.10 Standard price per quart of oil: $5.05 Required: 1. Calculate the direct materials price variance (MPV) and the direct materials usage variance (MUV) for June using the formula approach. If required, round your answers to the nearest cent. MPV $ MUV $ 2. Calculate the total direct materials variance for oil for June. If required, round your answer to the nearest cent. $ 3. What if the actual number of quarts of oil purchased in June had been 6,100 quarts, and the materials price variance was calculated at the time of purchase
Business
1 answer:
Ket [755]3 years ago
8 0

Answer:

Material Price Variance=  $301 Unfavorable

Material Quantity Variance=  $283 Favorable

Total direct materials variance for oil for June $ 18 Unfavorable

Material Price Variance=  $305 Unfavorable at the time of purchase

Explanation:

Guillermo's Oil and Lube Company

Actual number of oil changes performed: 980

Actual number of quarts of oil used: 6,020 quarts

Actual price paid per quart of oil: $5.10

Standard price per quart of oil: $5.05

Material Price Variance= (Actual Price * Actual Quantity)- (Standard Price * Actual Quantity)

Material Price Variance= ($5.10 *6,020)-($5.05 *6,020)= $ 30702- $ 30401

Material Price Variance= $301 Unfavorable

Material Quantity Variance= (Standard Price * Actual Quantity)-(Standard Price * Standard Quantity)

Material Quantity Variance=($5.05 *6,020)-($5.05 *6.2 * 980)=($5.05 *6,020)-($5.05 *6076)

Material Quantity Variance=$ 30401-30683.8= 282.8

Material Quantity Variance=  $283 Favorable

Total direct materials variance for oil for June=$301 Unfavorable- $283 Favorable= $ 18 Unfavorable

3. Material Price Variance= (Actual Price * Actual Quantity)- (Standard Price * Actual Quantity)

Material Price Variance= ($5.10 *6,100)-($5.05 *6,100)= $ 31110- $ 30805

Material Price Variance=  $305 Unfavorable

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Given that <span>Roberta, a store manager, uses her coercive power effectively to motivate employees. because of her coercive power, Roberta would be able to fire a subordinate.

</span><span>Coercive power is the ability to influence someone's decision making by taking something away as punishment or threatening punishment if the person does not follow instructions. It can be a severe way to get staff members to follow along with a company plan, but it can be necessary in some cases.</span>
5 0
3 years ago
During March, Pendergraph Corporation incurred $65,000 of actual Manufacturing Overhead costs. During the same period, the Manuf
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Answer: Credit to manufacturing overhead of $67000.

Explanation:

The journal entry to record the application of Manufacturing Overhead to Work in Process would be:

Debit Work in Progress $67000

Credit Manufacturing overhead $67000.

( To record the application of manufacturing overhead to work in process).

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3 years ago
Coronado Industries is constructing a building. Construction began on January 1 and was completed on December 31. Expenditures w
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Answer:

Coronado Industries

The weighted-average accumulated expenditures are:

= $8,388,333.

Explanation:

a) Data and Calculations:

Amount borrowed on June 1 = $3,170,000

Interest rate = 13%

Outstanding 11% 3-year note payable = $6,350,000

Outstanding 12% 4-year note payable = $12,350,000

Date               Expenditure      Weight     Weighted-Average

                                                                       Expenditure

March 1          $6,370,000         10/12                $5,308,333

June 1            $5,280,000          7/12                  3,080,000

December 31 $8,650,000         0/12                    0

Weighted-average accumulated expenditure $8,388,333

7 0
2 years ago
A company is offering to pay a stadium for naming rights. If the administrative costs for this sponsorship are $78,000, and thes
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Answer:

The amount of $71,760  , is offered by the company for the stadium naming rights.

Explanation:

As the total cost for the sponsorship is $78,000 but the cost has 8% revenue for the naming sponsorship. Therefore,

= Amount × % of revenue

= $78,000 × 8%

= $6,240

In order to compute the amount which is offered to pay for the stadium rights, the revenue amount to be deducted from the administrative cost:

= Cost - Revenue

= $78,000 - $6,240

= $71,760

6 0
3 years ago
Spielberg Inc. signed a $170,000 noninterest-bearing note due in five years from a production company eager to do business. Comp
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Answer:

$100,890

Explanation:

To determine the value of the debt we must calculate the present value of the note:

present value = future value of the note / (1 + interest rate)⁵

present value = $170,000 / (1 + 11%)⁵ = $170,000 / 1.11⁵ = $170,000 / 1.685

present value = $100,890

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3 years ago
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