Direct Materials Variances CompuWatch Inc. produces wrist-worn tablet computers. The company uses Thin Film Crystal (TFC) LCD displays for its products. Each tablet uses one display. The company produced 600 tablets during December. However, due to LCD defects, the company actually used 650 LCD displays during December. Each display has a standard cost of $6.00. 650 LCD displays were purchased for December production at a cost of $4,095. Determine the price variance, quantity variance, and total direct materials cost variance for December. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. And, enter your final variance amounts to the nearest whole dollar. Price variance Quantity variance Total direct materials cost variance
Direct Materials Variances CompuWatch Inc. produces wrist-worn tablet computers. The company uses Thin Film Crystal (TFC) LCD displays for its products. Each tablet uses one display. The company produced 600 tablets during December. However, due to LCD defects, the company actually used 650 LCD displays during December. Each display has a standard cost of $6.00. 650 LCD displays were purchased for December production at a cost of $4,095. Determine the price variance, quantity variance, and total direct materials cost variance for December. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. And, enter your final variance amounts to the nearest whole dollar. Price variance Quantity variance Total direct materials cost variance
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:Direct Materials Variances
CompuWatch Inc. produces wrist-worn tablet computers. The company uses Thin Film
Crystal (TFC) LCD displays for its products. Each tablet uses one display. The company
produced 600 tablets during December. However, due to LCD defects, the company
actually used 650 LCD displays during December. Each display has a standard cost of
$6.00. 650 LCD displays were purchased for December production at a cost of $4,095.
Determine the price variance, quantity variance, and total direct materials cost variance
for December. Enter a favorable variance as a negative number using a minus sign and
an unfavorable variance as a positive number. And, enter your final variance amounts to
the nearest whole dollar.
>
Price variance
Quantity variance
Total direct materials cost variance
$
→
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