Prepare the material usage variance Explain why (sometimes) a favorable usage variance may cause issues with the product. 2A 2B
Prepare the material usage variance Explain why (sometimes) a favorable usage variance may cause issues with the product. 2A 2B
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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
Transcribed Image Text:The Outdoor Vest company has provided the following information
about their product
Budget or standard information
Male
Female
Standard material used for each vest
Liner
9.4
7.0 yards
Filler
5.2
4.0 pounds
Standard direct labor hours for each vest
0.5
0.4 hours
Estimated planned production
6,200
5,000 Units
Standard labor rate
$14.00 per hour
Standard material cost
Liner
$8.00 per yard
Filler
$2.00 per pound
Actual information
Male
Female
Actual units produced
5,800
4,400
Actual labor hours worked
2,800
1,825
Actual labor rate
$14.50
$14.70
Actual material purchased and used
Liner
85,100 yards
Filler
48,000 pounds
Actual material cost per item
Liner
$8.20 Per yard
Filler
$1.90 Per pound
2A
Prepare the material usage variance
2B
Explain why (sometimes) a favorable usage variance may cause
issues with the product.
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