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just olya [345]
3 years ago
5

A company had a budgeted production of 12000 units and actual production of 13200 units. Two types of raw material, P and Q are

used in the manufacturing of the products. The budgeted raw material requirement of the company was expected to be 3 lbs. of Material P at a price of $ 0.25 per lbs. and 2 lbs. of Material Q at a price of $ 0.35 per lbs. for every unit produced. The company actually ended up using 42000 lbs. of P at an actual cost of $0.19 per lbs. and 25000 lbs. of Q at an actual cost of $0.38 per lbs. Calculate Direct Material Price and Usage Variance for material P and Q.\
Business
1 answer:
lara31 [8.8K]3 years ago
6 0

Answer:

Direct Material Price Variance:

P = $2,520 F

Q = $750 U

Direct Material Usage Variance:

P = $1,500 U

Q = $350 U

Explanation:

a) Data and Calculations:

Budgeted production units = 12,000

Actual production units =       13,200

                                                                P           Q

Budgeted raw material per unit        3 lbs        2 lbs

Price per lbs                                       $0.25      $0.35

Budgeted raw materials              36,000 lbs  24,000 lbs

Actual lbs of raw materials          42,000 lbs  25,000 lbs

Actual price per lbs                          $0.19        $0.38

Direct Material Price Variance = (Standard Price - Actual Price) * Actual Qty

P = $0.25 - $0.19 * 42,000 = $2,520 F

Q = $0.35 - $0.38 * 25,000 = $750 U

Direct Material Usage Variance = (Standard Qty - Actual Qty) * Standard Price

P = 36,000 - 42,000 * $0.25 = $1,500 U

Q = 24,000 - 25,000 * $0.35 = $350 U

                                   

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galben [10]

The variable overhead efficiency variance uses exactly same inputs as direct labor efficiency variance statement regarding the variable overhead variance analysis is true.

<h3>What is variable overhead?</h3>

The varying production costs a business incurs while operating are referred to as "variable overhead." As industrial output changes, so do variable overhead expenses. Different from variable overhead are the general expenditures associated with administrative tasks and other operations that have predetermined budgetary requirements. Organizations need to understand variable costs clearly in order to prevent overspending, which can reduce profit margins. They will be able to precisely set prices for future products thanks to this. For businesses to succeed and stay in operation, they must invest money in the development and promotion of their goods and services. The term "overhead" refers to all costs related to operating a firm, such as managers, salespeople, and marketers for both the corporate office and the manufacturing plants.

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6 0
8 months ago
"Ramon runs the marketing department at his company. His department gets a budget every year, and every year, he must spend the
miss Akunina [59]

Answer:

Property of additive inverse

Explanation:

Given: Ramon got $2.5 million for the annual marketing budget such that he must spend the budget such that  2,500,000-x=0  

To find: property of addition that help us to know what the value of x must be

Solution:

1 million is equal to 1,000,000

So,

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According to property of additive inverse,

a+(-a)=0

Given equation is 2,500,000-x=0

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8 0
3 years ago
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Answer:

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