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QS 21-8 (Algo) Direct materials price and quantity variances LO P3 A company reports the following for one of its products. Direct materials standard (3 pounds @ $3 per pound) Actual direct materials used (AQ) Actual units produced Actual cost of direct materials used AQ 250,000 Actual Cost AQ Actual Quantity SQ Standard Quantity AP = Actual Price SP Standard Price Compute the direct materials price and quantity variances and identify each as favorable or unfavorable. X X S 687,500 AP S 2.75 Direct materials price variance Direct materials quantity variance Total direct materials variance $ 62,500 S AQ 250,000 X X $ 750,000 62,500 Favorable $9 per unit 0 Unfavorable Unfavorable 250,000 pounds 60,000 units $ 687,500 SP $ 3.00 $ 0 SQ Standard Cost X X S SP 3.00

QS 21-8 (Algo) Direct materials price and quantity variances LO P3 A company reports the following for one of its products. Direct materials standard (3 pounds @ $3 per pound) Actual direct materials used (AQ) Actual units produced Actual cost of direct materials used AQ 250,000 Actual Cost AQ Actual Quantity SQ Standard Quantity AP = Actual Price SP Standard Price Compute the direct materials price and quantity variances and identify each as favorable or unfavorable. X X S 687,500 AP S 2.75 Direct materials price variance Direct materials quantity variance Total direct materials variance $ 62,500 S AQ 250,000 X X $ 750,000 62,500 Favorable $9 per unit 0 Unfavorable Unfavorable 250,000 pounds 60,000 units $ 687,500 SP $ 3.00 $ 0 SQ Standard Cost X X S SP 3.00

FINANCIAL ACCOUNTING
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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QS 21-8 (Algo) Direct materials price and quantity variances LO P3 A company reports the following for one of its products. Direct materials standard (3 pounds @ $3 per pound) Actual direct materials used (AQ) Actual units produced Actual cost of direct materials used AQ = Actual Quantity SQ Standard Quantity AP = Actual Price SP = Standard Price AQ 250,000 Actual Cost Compute the direct materials price and quantity variances and identify each as favorable or unfavorable. X X $687,500 AP $ 2.75 Direct materials price variance Direct materials quantity variance Total direct materials variance $ 62,500 S AQ 250,000 X X $ 750,000 62,500 Favorable $9 per unit 0 Unfavorable Unfavorable 250,000 pounds 60,000 units $ 687,500 SP $ 3.00 $ 0 SQ Standard Cost X X SP $ 3.00
Transcribed Image Text:QS 21-8 (Algo) Direct materials price and quantity variances LO P3 A company reports the following for one of its products. Direct materials standard (3 pounds @ $3 per pound) Actual direct materials used (AQ) Actual units produced Actual cost of direct materials used AQ = Actual Quantity SQ Standard Quantity AP = Actual Price SP = Standard Price AQ 250,000 Actual Cost Compute the direct materials price and quantity variances and identify each as favorable or unfavorable. X X $687,500 AP $ 2.75 Direct materials price variance Direct materials quantity variance Total direct materials variance $ 62,500 S AQ 250,000 X X $ 750,000 62,500 Favorable $9 per unit 0 Unfavorable Unfavorable 250,000 pounds 60,000 units $ 687,500 SP $ 3.00 $ 0 SQ Standard Cost X X SP $ 3.00
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