Answer a Direct materials variances Actual unit cost 6860014000 square yard 490

Answer a direct materials variances actual unit cost

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Answer:a.Direct materials variances:Actual unit cost = $68,600/14,000 square yard= $4.90 per square yardPrice variance = 14,000 x ($5.00 - $4.90)= $1,400 favorableEfficiency variance = $5.00 x (14,000 - (1,500 x 10))= $5,000 favorableb.Direct manufacturing labor variances:Actual labor rate = $79,800/7,600= $10.50 per hourPrice variance= 7,600 x ($10.50 - $10.00)= $3,800 unfavorableEfficiency variance= $10.00 x (7,600 - 7,500)= $1,000 unfavorableMr. Kareem AbozeedChapter 7 Page 17
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Ch 7 Revision145.Coffey Company maintains a very large direct materials inventory because of critical demands placed upon it for rush orders from large hospitals. Item A contains hard-to-get material Y. Currently, the standard cost of material Y is $2.00 per gram. During February, 22,000 grams were purchased for $2.10 per gram, while only 20,000 grams were used in production. There was no beginning inventory of material Y.Required:a.Determine the direct materials price variance, assuming that all materials costs arethe responsibility of the materials purchasing manager.b.Determine the direct materials price variance, assuming that all materials costs arethe responsibility of the production manager.c.Discuss the issues involved in determining the price variance at the point of purchase versus the point of consumption.Answer:a.Material price variance = 22,000 x ($2.10 - $2.00)= $2,200 unfavorableb.Material price variance = 20,000 x ($2.10 - $2.00)= $2,000 unfavorable148.Waddell Productions makes separate journal entries for all cost accounting related activities. It uses a standard cost system for all manufacturing items. For the month of June, the following activities have taken place:Direct Manufacturing Materials Purchased$300,000Direct Manufacturing Materials Used250,000Direct Materials Price Variance10,000unfavorable(at time of purchase)Direct Materials Efficiency Variance15,000favorableDirect Manufacturing Labor Price Variance6,000favorableDirect Manufacturing Labor Efficiency Variance4,000favorableDirect Manufacturing Labor Payable170,000Required:Record the necessary journal entries to close the accounts for the month.Answer:Materials Control$300,000Direct Manufacturing Materials Price Variance10,000Accounts Payable Control$310,000Work-in-Process Control$265,000Direct Materials Efficiency Variance$15,000Materials Control250,000Work-in-Process Control $180,000Direct Manufacturing Labor Price Variance$6,000Direct Manufacturing Labor Efficiency Variance4,000Wages Payable Control170,000Mr. Kareem AbozeedChapter 7 Page 18
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  • Accounting, Direct material price variance, Mr. Kareem Abozeed

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