Gipple Corporation makes a product that uses a material with the quantity standard of 7.3 grams per unit of output and the price standard of $6.00 per gram. In January the company produced 3,400 units using 24,870 grams of the direct material. During the month the company purchased 27,400 grams of the direct material at $6.10 per gram. The direct materials purchases variance is computed when the materials are purchased. The materials price variance for January is: $2,482 F $2,740 U $2,482 U $2,740 F
Gipple Corporation makes a product that uses a material with the quantity standard of 7.3 grams per unit of output and the price standard of $6.00 per gram. In January the company produced 3,400 units using 24,870 grams of the direct material. During the month the company purchased 27,400 grams of the direct material at $6.10 per gram. The direct materials purchases variance is computed when the materials are purchased. The materials price variance for January is: $2,482 F $2,740 U $2,482 U $2,740 F
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:Question 39
Gipple Corporation makes a product that uses a material with the quantity standard
of 7.3 grams per unit of output and the price standard of $6.00 per gram. In January
the company produced 3,400 units using 24,870 grams of the direct material. During
the month the company purchased 27,400 grams of the direct material at $6.10 per
gram. The direct materials purchases variance is computed when the materials are
purchased.
The materials price variance for January is:
$2,482 F
$2,740 U
$2,482 U
$2,740 F
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