Financial Accounting Harper Electronics developed the following per unit standardsfor its product: 7 pounds of direct materials at $8.50 per pound.Last month, the company purchased 30,000 pounds of directmaterials for $249,000, and 28,000 pounds were used inproduction.What is the direct materials price variance?a) $6,000 favorableb) $13,000 unfavorablec) $11,250 unfavorabled) $12,750 favorable

Step 1: Define Direct Materials Price VarianceThe Direct Materials Price Variance measures the…

Answered: Harper Electronics developed the…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter7: Budgeting

Section: Chapter Questions

Problem 17EA: The production cost for a waterproof phone case is $7 per unit and fixed costs are $23,000 per...

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Ed Co. manufactures two types of O rings, large and small. Both rings use the same material but require different amounts. Standard materials for both are shown. At the beginning of the month, Edve Co. bought 25,000 feet of rubber for $6.875. The company made 3,000 large O rings and 4,000 small O rings. The company used 14,500 feet of rubber. A. What are the direct materials price variance, the direct materials quantity variance, and the total direct materials cost variance? B. If they bought 10,000 connectors costing $310, what would the direct materials price variance be for the connectors? C. If there was an unfavorable direct materials price variance of $125, how much did they pay per toot for the rubber?
Lowell Manufacturing Inc. has a normal selling price of 20 per unit and has been selling 125,000 units per month. In November, Lowell Manufacturing decided to lower its price to 19 per unit expecting it can increase the units sold by 16%. a. Compute the normal revenue with a 20 selling price. b. Compute the planned revenue with a 19 selling price. c. Compute the actual revenue for November, assuming 135,000 units were sold in November at 19 per unit. d. Compute the revenue price variance, assuming 135,000 units were sold in November at 19 per unit. e. Compute the revenue volume variance, assuming 135,000 units were sold in November at 19 per unit. f. Analyze and interpret the lowering of the price to 19.
The production cost for UV protective sunglasses is $5.50 per unit and fixed costs are $19,400 per month. How much is the favorable or unfavorable variance if 14,000 units were produced for a total of $97,000?
Kavallia Company set a standard cost for one item at 328,000; allowable deviation is 14,500. Actual costs for the past six months are as follows: Required: 1. Calculate the variance from standard for each month. Which months should be investigated? 2. What if the company uses a two-part rule for investigating variances? The allowable deviation is the lesser of 4 percent of the standard amount or 14,500. Now which months should be investigated?
Nabors Company had actual quality costs for the year ended June 30, 20x5, as given below. At the zero-defect state, Nabors expects to spend 375,000 on quality engineering, 75,000 on vendor certification, and 50,000 on packaging inspection. Assume sales to be 25,000,000. Required: 1. Prepare a long-range performance report for 20x5. What does this report tell the management of Nabors? 2. Explain why quality costs still are present for the zero-defect state. 3. What if Nabors achieves the zero-defect state reflected in the report? What are some of the implications of this achievement?
April Industries employs a standard costing system in the manufacturing of its sole product, a park bench. They purchased 60,000 feet of raw material for $300,000, and it takes S feet of raw materials to produce one park bench. In August, the company produced 10,000 park benches. The standard cost for material output was $100,000, and there was an unfavorable direct materials quantity variance of $6,000. A. What is April Industries standard price for one unit of material? B. What was the total number of units of material used to produce the August output? C. What was the direct materials price variance for August?
At the beginning of the year, Lopez Company had the following standard cost sheet for one of its chemical products: Lopez computes its overhead rates using practical volume, which is 80,000 units. The actual results for the year are as follows: (a) Units produced: 79,600; (b) Direct labor: 158,900 hours at 18.10; (c) FOH: 831,000; and (d) VOH: 112,400. Required: 1. Compute the variable overhead spending and efficiency variances. 2. Compute the fixed overhead spending and volume variances.
Corolla Manufacturing has a standard cost for steel of $20 per pound for a product that uses 4 pounds of steel. During September, Corolla purchased and used 4,200 pounds of steel to make 1,040 units. They paid $20.75 per pound for the steel. Compute the direct materials price variance, the direct materials quantity variance, and the total direct materials cost variance for the month of September. What would change if Corolla had made 2,200 units?
A company purchases 48000 pounds of materials. The materials price variance is $12000 favorable. What is the difference between the standard price and the actual price paid for the materials? $1.00 $4.00 $0.25 Cannot be determined from the data provided.
Glassica, Inc. is a manufacturer of lead crystal glasses. The standard direct materials quantity is 2.00 pounds per glass at a cost of $1.00 per pound. The actual result for one month's production of 7,000 glasses is 1.2 pounds per glass, at a cost of $0.30 per pound. The direct materials efficiency variance is O 650 U O $6,930 F O $6,930 U O $5,800 F O $5,600 F TAZ
During August, 2021, a company produced 1,000 units of a product using 3,600 pounds of direct material at a cost of P2.20 per pound. The direct material standard requires 4 pounds of material per unit of product at a standard price of P2.00 per pound. 5. The material quantity variance is: a. P880 unfavorable c. P800 favorable d. 800 unfavorable b. P880 favorable The standard direct labor cost for a product is 3 hours at P6 per hour. Budgeted production was 10,000 units for the year and actual production was 12,000 units. Actual direct labor cost was P210,375 for 38,250 hours. 6. Compute for (1) the labor rate variance and (2) labor efficiency variance (1) P19,125 F and P13,500 U (1) P19,125 U and P13,500 F (1) P19,125 F and P49,500 U (1) P19,125 U and P49,500 F
Ivanhoe Creations purchased 7100 feet of copper tubing at a price of $2.50 per foot and used 7240 feet during the period. The standard price of the copper tubing was $2.30 per foot. What is Ivanhoe Creations' direct materials price variance for the period?

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