Materials VariancesKrumple Inc. produces aluminum cans. Production of 12-ounce cans has a standard unit quantity of 4.4 ounces of aluminum per can. During the month of April,297,000 cans were produced using 1,256,000 ounces of aluminum. The actual cost of aluminum was $0.17 per ounce and the standard price was $0.06 per ounceThere are no beginning or ending inventories of aluminum.Required:Calculate the materials price and usage variances using the columnar and formula approaches. Enter amounts as positive numbers and select Favorable orUnfavorable.Materials Price VarianceMaterial Usage Variance iFeedback138,160 UnfavorableFavorable✓Check My Work1. Determine the material price variance (actual cost per unit standard cost per unit) x actual quantity2. Compare the actual to the standard cost and determine if the result from above is favorable or unfavorable3. Determine the material usage variance = (actual quantity standard quantity) x standard cost per unit.4. Compare the actual to the standard quantities and determine if the result from above is favorable or unfavorableReview the "How to Calculate Materials Variances: Formula and Columnar Approaches" example in your text.

Variances are the differences between the actual values and budgeted values. If the budgeted values…

Krumple Inc. produces aluminum cans. Production of 12-ounce cans has a standard unit quantity of 4.4 ounces of aluminum per can. During the month of April, 297,000 cans were produced using 1,256,000 ounces of aluminum. The actual cost of aluminum was $0.17 per ounce and the standard price was $0.06 per ounc There are no beginning or ending inventories of aluminum. Required: Calculate the materials price and usage variances using the columnar and formula approaches. Enter amounts as positive numbers and select Favorable or Unfavorable. Materials Price Variance Material Usage Variance Feedback 138,160✔ Unfavorable Favorable

Krumple Inc. produces aluminum cans. Production of 12-ounce cans has a standard unit quantity of 4.4 ounces of aluminum per can. During the month of April, 297,000 cans were produced using 1,256,000 ounces of aluminum. The actual cost of aluminum was $0.17 per ounce and the standard price was $0.06 per ounc There are no beginning or ending inventories of aluminum. Required: Calculate the materials price and usage variances using the columnar and formula approaches. Enter amounts as positive numbers and select Favorable or Unfavorable. Materials Price Variance Material Usage Variance Feedback 138,160✔ Unfavorable Favorable

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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orsyth Company manufactures one product, it does not maintain any beginning or ending inventories, and its uses a standard cost system. During the year, the company produced and sold 10,000 units at a price of $154 per unit. Its standard cost per unit produced is $124 and its selling and administrative expenses totaled $244,500. Forsyth does not have any variable manufacturing overhead costs and it recorded the following variances during the year: Materials price variance $ 8,400 F Materials quantity variance $ 12,100 U Labor rate variance $ 5,400 U Labor efficiency variance $ 6,300 F Fixed overhead budget variance $ 4,400 F Fixed overhead volume variance $ 13,900 F 1. When Forsyth closes its standard cost variances, the cost of goods sold will increase (decrease) by how much? 2. Prepare an income statement for the year.
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