For the current period, Juan Company’s standard cost of direct materials is $140,000. The direct materials variances consist of a $18,000 favorable price variance and a $2,500 favorable quantity variance. What is the actual cost of direct materials? For the current period, Juan Company's standard cost of direct materials is$140,000. The direct materials variances consist of a $18,000 favorable pricevariance and a $2,500 favorable quantity varlance. What is the actual cost ofdirect materials?Actual cost of direct materials

Actual cost of direct material means the cost which has been actually incurred on the direct…

Answered: For the current period, Juan Company’s…

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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For the current period, Juan Company’s standard cost of direct materials is $140,000. The direct materials variances consist of a $18,000 favorable price variance and a $2,500 favorable quantity variance. What is the actual cost of direct materials?

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

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