Question no 3 Penobscot Company employs a standard cost system in which direct materials inventory is carried at standard cost. The company has established the following standards for the prime costs of one unit of product: Standard Standard Price Standard Quantity Cost Direct materials 12.0 pounds $14.00/pound 168.00 During April, the company purchased 330,000 pounds of material at a total cost of $4,686,000. Among that 70% would be direct material. The company manufactured 25,000 units of product during April using 302,000 pounds of material, which has 25% of indirect material. Required: a) What is the price and quantity variance for the direct material acquired by the company during April?

Question no 3 Penobscot Company employs a standard cost system in which direct materials inventory is carried at standard cost. The company has established the following standards for the prime costs of one unit of product: Standard Standard Price Standard Quantity Cost Direct materials 12.0 pounds $14.00/pound 168.00 During April, the company purchased 330,000 pounds of material at a total cost of $4,686,000. Among that 70% would be direct material. The company manufactured 25,000 units of product during April using 302,000 pounds of material, which has 25% of indirect material. Required: a) What is the price and quantity variance for the direct material acquired by the company during April?

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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