A company reports the following for one of its products. Direct materials standard (4 pounds @ $3 per pound) Actual direct materials used (AQ) Actual units produced Actual cost of direct materials used i $ 12 per unit 350,000 pounds 70,000 units Actual Cost $ 910,000 AQ - Actual Quantity SQ=Standard Quantity AP Actual Price SP=Standard Price Compute the direct materials price and quantity variances and identify each as favorable or unfavorable. Standard Cost

A company reports the following for one of its products. Direct materials standard (4 pounds @ $3 per pound) Actual direct materials used (AQ) Actual units produced Actual cost of direct materials used i $ 12 per unit 350,000 pounds 70,000 units Actual Cost $ 910,000 AQ - Actual Quantity SQ=Standard Quantity AP Actual Price SP=Standard Price Compute the direct materials price and quantity variances and identify each as favorable or unfavorable. Standard Cost

Name: A company reports the following for one of its products.Direct materi
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Description: A company reports the following for one of its products.Direct materials standard (4 pounds @ $3 per pound)Actual direct materials used (AQ)Actual units producedActual cost of direct materials used i$. 12 per unit350,000 pounds70,000 unitsActual Cos

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Benoit Company produces three products—A, B, and C. Data concerning the three products follow (per unit): Product A B C Selling price $ 92.00 $ 66.00 $ 82.00 Variable expenses: Direct materials 27.60 18.00 12.00 Other variable expenses 27.60 31.50 45.40 Total variable expenses 55.20 49.50 57.40 Contribution margin $ 36.80 $ 16.50 $ 24.60 Contribution margin ratio 40% 25% 30% The company estimates that it can sell 950 units of each product per month. The same raw material is used in each product. The material costs $3 per pound with a maximum of 6,100 pounds available each month. Required: 1. Calculate the contribution margin per pound of the constraining resource for each product. 2. Which orders would you advise the company to accept first, those for A, B, or C? Which orders second? Third? 3. What is the maximum contribution margin that the company can earn per month if it makes optimal use of its 6,100 pounds of materials?
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1. The standard and actual prices per pound of raw material are $4.00 and $4.50, respectively. A total of 10,500 pounds of raw material was purchased and then used to produce 5,000 units. The quantity standard allows two pounds of the raw material per unit produced. What was the materials quantity variance? a. $5,000 unfavorable b. $5,000 favorable c. $2,000 favorable d. $2,000 unfavorable 2. Referring to the facts in question 1 above, what was the material price variance? a. $5,250 favorable b. $5,250 unfavorable c. $5,000 unfavorable d. $5,000 favorable
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