question archive Buerhle Company purchased at a cost of $12,802) and used 3,700 kg of materials during May
Buerhle Company purchased at a cost of $12,802) and used 3,700 kg of materials during May
Subject:AccountingPrice:2.87 Bought7
Buerhle Company purchased at a cost of $12,802) and used 3,700 kg of materials during May. Buerhle's standard cost of materials per unit produced is based on 2 kg per unit at a cost $3.55 per kilogram. Production in May was 1,780 units.
(a) Calculate the total, price, and quantity variances for materials.
Material price variance $ -333 Favourable
Material quantity variance $ 140 Unfavourable
Material total variance 193 Unfavourable
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Answer:
Calculation of material variances :
1. Total Material varaince = Standard cost - Actual cost
= (1780 units x 2 kg per unit x $3.55 per kg) - ($12802)
= $12638 - $12802
= $164 Unfavorable
2. Material Price Variance = (Standard price per unit - Actual price per unit) x Actual units purchased
= {$3.55 - (12802/3700)} x 3700
= {$3.55 - $3.46} x 3700
= $333 Favorable
3.Material Quantity variance = (Standard quantity - actual quantity) x Standard Price per unit
= { (1780 x 2) - 3700} x $3.55
= (3560 - 3700) x $3.55
= 497 Unfavorable
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