A product has a standard materials usage and cost of 4 pounds per unit at $7.00 per pound. During the month, 2,400 pounds of materials were purchased at $7.30 per pound. Production for the month totaled 550 units, requiring 2,100 pounds of materials. Compute the materials variances.

A product has a standard materials usage and cost of 4 pounds per unit at $7.00 per pound. During the month, 2,400 pounds of materials were purchased at $7.30 per pound. Production for the month totaled 550 units, requiring 2,100 pounds of materials. Compute the materials variances.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter10: Standard Costing And Variance Analysis

Section: Chapter Questions

Problem 58E: At the beginning of the year, Lopez Company had the following standard cost sheet for one of its...

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At the beginning of the year, Lopez Company had the following standard cost sheet for one of its chemical products: Lopez computes its overhead rates using practical volume, which is 80,000 units. The actual results for the year are as follows: (a) Units produced: 79,600; (b) Direct labor: 158,900 hours at 18.10; (c) FOH: 831,000; and (d) VOH: 112,400. Required: 1. Compute the variable overhead spending and efficiency variances. 2. Compute the fixed overhead spending and volume variances.
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