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Evergreen Ceramics produces large planters to be used in urban landscaping projects. A special earth clay is used to make the planters. The standard quantity of clay used for each planter is 33 pounds. The company uses a standard cost of $2.35 per pound of clay. Evergreen produced 2,000 planters in May. In that month, 68,000 pounds of clay were purchased and used at the total cost of $153,000 Read the requirements. Requirement 1. Calculate the direct material price variance. Begin by determining the formula for the price variance, then compute the price variance for the direct materials. (Enter the variance as a positive number. Enter currency amounts in the formula to the nearest cent and then round the final variance amount to the nearest whole dollar. Label the variance as favorable (F) or unfavorable (U). Abbreviations used: DM = Direct materials) X X ) = = DM price variance

Evergreen Ceramics produces large planters to be used in urban landscaping projects. A special earth clay is used to make the planters. The standard quantity of clay used for each planter is 33 pounds. The company uses a standard cost of $2.35 per pound of clay. Evergreen produced 2,000 planters in May. In that month, 68,000 pounds of clay were purchased and used at the total cost of $153,000 Read the requirements. Requirement 1. Calculate the direct material price variance. Begin by determining the formula for the price variance, then compute the price variance for the direct materials. (Enter the variance as a positive number. Enter currency amounts in the formula to the nearest cent and then round the final variance amount to the nearest whole dollar. Label the variance as favorable (F) or unfavorable (U). Abbreviations used: DM = Direct materials) X X ) = = DM price variance

FINANCIAL ACCOUNTING
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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Evergreen Ceramics produces large planters to be used in urban landscaping projects. A special earth clay is used to make the planters. The standard quantity of clay used for each planter is 33 pounds. The company uses a standard cost of $2.35 per pound of clay. Evergreen produced 2,000 planters in May. In that month, 68,000 pounds of clay were purchased and used at the total cost of $153,000 Read the requirements. Requirement 1. Calculate the direct material price variance. Begin by determining the formula for the price variance, then compute the price variance for the direct materials. (Enter the variance as a positive number. Enter currency amounts in the formula to the nearest cent and then round the final variance amount to the nearest whole dollar. Label the variance as favorable (F) or unfavorable (U). Abbreviations used: DM = Direct materials) X ) - = DM price variance
Transcribed Image Text:Evergreen Ceramics produces large planters to be used in urban landscaping projects. A special earth clay is used to make the planters. The standard quantity of clay used for each planter is 33 pounds. The company uses a standard cost of $2.35 per pound of clay. Evergreen produced 2,000 planters in May. In that month, 68,000 pounds of clay were purchased and used at the total cost of $153,000 Read the requirements. Requirement 1. Calculate the direct material price variance. Begin by determining the formula for the price variance, then compute the price variance for the direct materials. (Enter the variance as a positive number. Enter currency amounts in the formula to the nearest cent and then round the final variance amount to the nearest whole dollar. Label the variance as favorable (F) or unfavorable (U). Abbreviations used: DM = Direct materials) X ) - = DM price variance
Requirements 1. Calculate the direct material price variance. 2. Calculate the direct material quantity variance.
Transcribed Image Text:Requirements 1. Calculate the direct material price variance. 2. Calculate the direct material quantity variance.
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