EA5. LO 8.2 Sitka Industries uses a cost system that carries direct materials inventory at a standard cost. The controller has established these standards for one ladder (unit): Standard Standard Standard Quantity Price Cost 3 pounds 2.00 hours $4.50 per pound $12.00 per hour Direct materials $13.50 Direct labor $24.00 Total cost $37.50 Sitka Industries made 3,000 ladders in July and used 8,800 pounds of material to make these units. Smith Industries bought 15,500 pounds of material in the current period. There was a $250 unfavorable direct materials price variance. A. How much in total did Sitka pay for the 15,500 pounds? B. What is the direct materials quantity variance? C. What is the total direct material cost variance? D. What if 9,500 pounds were used to make these ladders, what would be the direct materials quantity variance? E. If there was a $340 favorable direct materials price variance, how much did Sitka for the 15,500 pounds of material? раy

EA5. LO 8.2 Sitka Industries uses a cost system that carries direct materials inventory at a standard cost. The controller has established these standards for one ladder (unit): Standard Standard Standard Quantity Price Cost 3 pounds 2.00 hours $4.50 per pound $12.00 per hour Direct materials $13.50 Direct labor $24.00 Total cost $37.50 Sitka Industries made 3,000 ladders in July and used 8,800 pounds of material to make these units. Smith Industries bought 15,500 pounds of material in the current period. There was a $250 unfavorable direct materials price variance. A. How much in total did Sitka pay for the 15,500 pounds? B. What is the direct materials quantity variance? C. What is the total direct material cost variance? D. What if 9,500 pounds were used to make these ladders, what would be the direct materials quantity variance? E. If there was a $340 favorable direct materials price variance, how much did Sitka for the 15,500 pounds of material? раy

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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Question

EA5. LO 8.2 Sitka Industries uses a cost system that carries direct materials inventory at a
standard cost. The controller has established these standards for one ladder (unit):
Standard
Standard
Standard
Quantity
Price
Cost
$4.50 per pound
$12.00 per hour
Direct materials
3 pounds
$13.50
Direct labor
2.00 hours
$24.00
Total cost
$37.50
Sitka Industries made 3,000 ladders in July and used 8,800 pounds of material to make these
units. Smith Industries bought 15,500 pounds of material in the current period. There was a
$250 unfavorable direct materials price variance.
A. How much in total did Sitka pay for the 15,500 pounds?
B. What is the direct materials quantity variance?
C. What is the total direct material cost variance?
D. What if 9,500 pounds were used to make these ladders, what would be the direct
materials quantity variance?
E. If there was a $340 favorable direct materials price variance, how much did Sitka pay
for the 15,500 pounds of material?

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