McHenry Corp
Subject:AccountingPrice: Bought3
McHenry Corp. makes wrought iron garden sculptures. During April, the purchasing agent bought 25,600 pounds of scrap iron at $ 0.64 per pound. During the month, 21,400 pounds of scrap iron were used to produce 600 sculptures. Although each sculpture is slightly different, McHenry uses a standard quantity per sculpture of 35 pounds of scrap iron at a standard cost of $ 0.70 per pound. a. For April, compute the direct material price variance (based on the quantity purchased) and the direct material quantity variance (based on quantity used). b. Identify the titles of individuals in the firm who would be responsible for each of the variances. c. Provide some possible explanations for the variances computed in (a).
