Cycle USA is in the business of making innertubes for bicycles. They manufacture both large and small innertubes. Both of the tubes use the same material but require different amounts of material. The material usage is as follows: LargeSmallRubber3 feet at $0.25 per foot1.25 feet at $0.25 per footConnector1 at $0.031 at $0.03 On June 1, Cycle USA purchased 25,000 feet of rubber for $6,875. During the month of June, Cycle USA used 14,500 feet of rubber to make 3,000 large tubes and 4,000 small tubes.A. Calculate the direct materials price variance, the direct materials quantity variance, and the total direct materials cost variance? Direct Materials Price Variance Direct Material Quantity Variance Total Direct Materials Cost Variance B. If Cycle USA bought 10,000 connectors costing $310, what would the direct materials price variance be for the connectors? Direct Materials Price Variance C. How much did they pay per foot for the rubber if there was an unfavorable direct materials price variance of $125?

In standard costing we calculate variances to find out deviation from budegeted…

Answered: Cycle USA is in the business

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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Cycle USA is in the business of making innertubes for bicycles. They manufacture both large and small innertubes. Both of the tubes use the same material but require different amounts of material. The material usage is as follows:


	Large	Small
Rubber	3 feet at $0.25 per foot	1.25 feet at $0.25 per foot
Connector	1 at $0.03	1 at $0.03

On June 1, Cycle USA purchased 25,000 feet of rubber for $6,875. During the month of June, Cycle USA used 14,500 feet of rubber to make 3,000 large tubes and 4,000 small tubes.

A. Calculate the direct materials price variance, the direct materials quantity variance, and the total direct materials cost variance?
	Direct Materials Price Variance
	Direct Material Quantity Variance
	Total Direct Materials Cost Variance

B. If Cycle USA bought 10,000 connectors costing $310, what would the direct materials price variance be for the connectors?
	Direct Materials Price Variance

C. How much did they pay per foot for the rubber if there was an unfavorable direct materials price variance of $125?

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