Purvis Manufacturing, which produces a single product, has prepared the following standard cost sheet for one unit of the product. Direct materials (6 pounds at $2 per pound) $12 Direct labor (2 hours at $12 per hour) $24 During the month of April, the company manufactures 300 units and incurs the following actual costs. Direct materials purchased and used (1,850 pounds) $4,070 Direct labor (620 hours) $7,130 Compute the total, price variance for materials. Indicate if the variance is (F) or (U) Materials price variance:

Q: Define cost behaviour.

A: High-Low Method: The high-low method is the method by which the variable component and the fixed…

Q: Define sales volume variance.

A: Sales volume variance (also known as sales quantity variance) occurs when the actual quantity of…

Q: What are the factors Affecting Cost Management?

A: The objective of this question is to identify and explain the various factors that can influence…

Q: Which do you think is more important for controlling fixed overhead costs: the spending variance or…

A: (This is not a subjective matter of opinion but rather is based on accounting principles and theory…

Q: Define Cost effectiveness.

A: Cost effectiveness refers to the examination of both cost and health outcomes of different course of…

Q: what are the possible causes of adverse Material usage variance

A: The variation in material consumption is determined as the difference between the quantity of actual…

Q: Explain the term internal failure costs.

A: Internal failure costs: Internal failure costs include additional production-related costs that are…

Q: I need help determining the price volume variance

A: The volume variance is the difference between actual and estimated volume. Price variance is the…

Q: Define cost structure.

A: Cost: The amount paid to purchase the asset, install it, and put it into operations, is referred to…

Q: Explain the term flexible budget variance.

A: Flexible Budget: It is a type of budget that changes based on the volume of business activity.…

Q: Explain variable overhead costs.

A: Variable Costing: “Variable costing is a method that allocates only variable manufacturing costs to…

Q: What are the Step-Cost Behaviors?

A: The objective of this question is to understand the concept of step-cost behaviors in the field of…

Q: Explain direct labour efficiency variance.

A: Variance: Variance refers to the difference level in the actual cost incurred and standard cost. The…

Q: Describe planning for variable overhead costs.

A: Variable Cost: The cost which is not fixed is called a variable cost. This cost is directly…

Q: Describe the components of contribution margin.

A: Contribution Margin: Contribution Margin refers to the margin of profit expected by the company. The…

Q: Examples of varaible cost

A: Variable costs are those costs which changes along with change in level of activity. As production…

Variance Analysis

In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance. 

Standard Costing

The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.