Solutions%20to%20missed%20tutorial%20Nov%2019%20or%2020%20Exercise%2010-10

# Solutions%20to%20missed%20tutorial%20Nov%2019%20or%2020%20Exercise%2010-10

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Exercise 10-10  (30 minutes) 1. a. Notice in the solution below that the materials price variance is  computed on the entire amount of materials purchased,  whereas the materials quantity variance is computed only on  the amount of materials used in production. Actual Quantity of  Inputs, at  Actual Price Actual Quantity of  Inputs, at  Standard Price Standard Quantity  Allowed for Output, at  Standard Price (AQ × AP) (AQ × SP) (SQ × SP) 70,000 diodes × \$0.28  per diode 70,000 diodes × \$0.30  per diode 40,000 diodes* × \$0.30  per diode = \$19,600 = \$21,000 = \$12,000 Price Variance,  \$1,400 F 50,000 diodes × \$0.30 per diode = \$15,000 Quantity Variance,  \$3,000 U *5,000 toys × 8 diodes per toy = 40,000 diodes Alternative Solution: Materials Price Variance = AQ (AP – SP) 70,000 diodes (\$0.28 per diode – \$0.30 per diode) = \$1,400 F Materials Quantity Variance = SP (AQ – SQ) \$0.30 per diode (50,000 diodes – 40,000 diodes) = \$3,000 U

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## Solutions%20to%20missed%20tutorial%20Nov%2019%20or%2020%20Exercise%2010-10

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