Patricia Rice, the controller, does not share the purchasing department's euphoria. She is fully aware of the followingquarterly purchases of direct materials:FirstSecondThirdFourthQuarterQuarterQuarterQuarterQuantity5,0005,0005,00025,000Purchase price (per kilogram)$68.00$69.00$74.00Required:1. Calculate the direct materials purchase price variance for the fourth quarter and for the year. How much of each purchase pricevariance is attributable to changes in foreign currency exchange rates? (Do not round intermediate calculations.)Direct materials purchase-price variance for the 4th quarterDirect materials purchase-price variance for the yearPrice variance due to changes in exchange rate Required information(The following information applies to the questions displayed below.]Jonas Materials Science (JMS) purchases its materials from several countries. As part of its cost-control program, JMS usesa standard cost system for all aspects of its operations, including purchases of direct materials. The company establishesstandard costs for direct materials at the beginning of each fiscal year.Pat Butch, the purchasing manager, is happy with the result of the year just ended. He believes that the purchase pricevariance for direct materials for the year will be favorable and is very confident that his department has at least met thestandard prices. The preliminary report from the controller's office confirms his jubilation. Following is a portion of thepreliminary report:Total quantity purchasedAverage price per kilogranStandard price per kilogran40,000 kilograms$50.00$ 60.00Budgeted quantity per quarter5,000 kilogransIn the fourth quarter, the purchasing department increased purchases from the budgeted normal volume of 5,000 to25,000 kilograms to meet the increased demands, which was a result of the firm's unexpected success in a fiercelycompetitive bidding. The substantial increase in the volume to be purchased forced the purchasing department to searchfor alternative suppliers. After frantic searches, it found suppliers in several foreign countries that could meet the firm'sneeds and could provide materials with higher quality than that of JMS's regular supplier. The purchasing department wasvery reluctant to make the purchase because the negotiated price was $77.00 per kilogram, including shipping and importduty. However, this original reluctance disappeared upon learning that the actual cost of the purchases would be muchlower than expected due to currency devaluations (the result of financial turmoil in several of the countries in the region).Patricia Rice, the controller, does not share the purchasing department's euphoria. She is fully aware of the followingquarterly purchases of direct materials:

Name: Patricia Rice, the controller, does not share the purchasing departme
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Description: Patricia Rice, the controller, does not share the purchasing department's euphoria. She is fully aware of the followingquarterly purchases of direct materials:FirstSecondThirdFourthQuarterQuarterQuarterQuarterQuantity5,0005,0005,00025,000Purchase pr

Variance: - Variance is the difference of budgeted/expected cost and actual cost. Variance Analysis:…

Business

Accounting

Patricia Rice, the controller, does not share the purchasing department's euphoria. She is fully aware of the following quarterly purchases of direct materials: First Third Fourth Second Quarter Quarter Quarter Quarter Quantity 5,000 5,000 5,000 25,000 Purchase price (per kilogram) $68.00 $69.00 $74.00 Required: 1. Calculate the direct materials purchase price variance for the fourth quarter and for the year. How much of each purchase price variance is attributable to changes in foreign currency exchange rates? (Do not round intermediate calculations.) Direct materials purchase-price variance for the 4th quarter Direct materials purchase-price variance for the year Price variance due to changes in exchange rate

Patricia Rice, the controller, does not share the purchasing department's euphoria. She is fully aware of the following quarterly purchases of direct materials: First Third Fourth Second Quarter Quarter Quarter Quarter Quantity 5,000 5,000 5,000 25,000 Purchase price (per kilogram) $68.00 $69.00 $74.00 Required: 1. Calculate the direct materials purchase price variance for the fourth quarter and for the year. How much of each purchase price variance is attributable to changes in foreign currency exchange rates? (Do not round intermediate calculations.) Direct materials purchase-price variance for the 4th quarter Direct materials purchase-price variance for the year Price variance due to changes in exchange rate

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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