Problem 4: Singh Corporation makes a product with the following standard costs for a raw material used in its production: Standard quantity of the material Standard price of the material The following data pertain to a recent month's operations: Actual material purchased Actual cost of material purchased! Actual material used in production Actual output 6 meters per unit produced $15 per meter 3,600 meters $ 60,780 3,200 meters 530 units produced The direct materials purchases variance is computed when the materials are purchased. The direct materials quantity variance is computed when the materials are used. Required: a. What is the materials price variance for the month? b. What is the materials quantity variance for the month? c. Which variances, if any, do you believe the corporation should investigate? Why?

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Problem 4:
Singh Corporation makes a product with the following standard costs for a raw material used in
its production:
Standard quantity of the material
Standard price of the material
The following data pertain to a recent month's operations:
Actual material purchased
Actual cost of material purchased
Actual material used in production
Actual output
6 meters per unit produced
$15 per meter
3,600 meters
$ 60,780
3,200 meters
530 units produced
The direct materials purchases variance is computed when the materials are purchased.
The direct materials quantity variance is computed when the materials are used.
Required:
a. What is the materials price variance for the month?
b. What is the materials quantity variance for the month?
c. Which variances, if any, do you believe the corporation should investigate? Why?
Transcribed Image Text:Problem 4: Singh Corporation makes a product with the following standard costs for a raw material used in its production: Standard quantity of the material Standard price of the material The following data pertain to a recent month's operations: Actual material purchased Actual cost of material purchased Actual material used in production Actual output 6 meters per unit produced $15 per meter 3,600 meters $ 60,780 3,200 meters 530 units produced The direct materials purchases variance is computed when the materials are purchased. The direct materials quantity variance is computed when the materials are used. Required: a. What is the materials price variance for the month? b. What is the materials quantity variance for the month? c. Which variances, if any, do you believe the corporation should investigate? Why?
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