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Find material price variance

Find material 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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Find material price variance

The following standard costs were developed for one of the products of ELJAY Sdn Bhd (ESB): STANDARD COST PER UNIT RM 12.00 Direct materials 3 feet @ RM4.00 per foot 5 hours @ RM8.00 per hour 5 hours @ RM4.00 per hour 5 hours @ RM6.00 per hour Direct labor 40.00 Variable overhead Fixed overhead 20.00 30.00 Total standard cost per unit 102.00 The following information is available regarding the company's operations for the period: Units produced Materials purchased Materials used 40,000 240,000 feet at RM4.40 per foot 150,000 feet 220,000 hours at RM8.30 per hour Direct labor Overhead incurred: Variable Fixed RM770,000 RM900,000 Budgeted fixed overhead for the period is RM960,000, and the standard fixed overhead rate is based on the expected capacity of 160,000 direct labor hours. REQUIRED: (a) Compute the following variances. Indicate whether it is Favorable (F) or Unfavorable (UF) variance.
Transcribed Image Text:The following standard costs were developed for one of the products of ELJAY Sdn Bhd (ESB): STANDARD COST PER UNIT RM 12.00 Direct materials 3 feet @ RM4.00 per foot 5 hours @ RM8.00 per hour 5 hours @ RM4.00 per hour 5 hours @ RM6.00 per hour Direct labor 40.00 Variable overhead Fixed overhead 20.00 30.00 Total standard cost per unit 102.00 The following information is available regarding the company's operations for the period: Units produced Materials purchased Materials used 40,000 240,000 feet at RM4.40 per foot 150,000 feet 220,000 hours at RM8.30 per hour Direct labor Overhead incurred: Variable Fixed RM770,000 RM900,000 Budgeted fixed overhead for the period is RM960,000, and the standard fixed overhead rate is based on the expected capacity of 160,000 direct labor hours. REQUIRED: (a) Compute the following variances. Indicate whether it is Favorable (F) or Unfavorable (UF) variance.
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