Regent Corporation uses a standard cost system to account for the costs of its one product. Materials standards are 3 pounds of material at $14.00 per pound, and labor standards are 8 hours of labor at a standard wage rate of $10.6. During July, Regent Corporation produced 3,100 units. Materials purchased and used totaled 10,500 pounds at a total cost of $143,113. Payroll totaled $150,780 for 33,150 hours worked. Required: a. Calculate the direct materials price variance. Note: Do not round your intermediate calculations. Indicate the effect of variance by selecting "Favorable", "Unfavorable", or "None" for no effect (i.e., zero variance). b. Calculate the direct materials quantity variance. Note: Indicate the effect of variance by selecting "Favorable", "Unfavorable", or "None" for no effect (i.e., zero variance). c. Calculate the direct materials spending variance. Note: Indicate the effect of variance by selecting "Favorable", "Unfavorable", or "None" for no effect (i.e., zero variance). a. Price Variance b. Quantity Variance c. Spending Variance

Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter9: Standard Costing: A Functional-based Control Approach
Section: Chapter Questions
Problem 33P: Business Specialty, Inc., manufactures two staplers: small and regular. The standard quantities of...
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Regent Corporation uses a standard cost system to account for the costs of its one product. Materials standards are 3 pounds of
material at $14.00 per pound, and labor standards are 8 hours of labor at a standard wage rate of $10.6. During July, Regent
Corporation produced 3,100 units. Materials purchased and used totaled 10,500 pounds at a total cost of $143,113. Payroll totaled
$150,780 for 33,150 hours worked.
Required:
a. Calculate the direct materials price variance.
Note: Do not round your intermediate calculations. Indicate the effect of variance by selecting "Favorable", "Unfavorable", or
"None" for no effect (i.e., zero variance).
b. Calculate the direct materials quantity variance.
Note: Indicate the effect of variance by selecting "Favorable", "Unfavorable", or "None" for no effect (i.e., zero variance).
c. Calculate the direct materials spending variance.
Note: Indicate the effect of variance by selecting "Favorable", "Unfavorable", or "None" for no effect (i.e., zero variance).
a. Price Variance
b. Quantity Variance
c. Spending Variance
Transcribed Image Text:Regent Corporation uses a standard cost system to account for the costs of its one product. Materials standards are 3 pounds of material at $14.00 per pound, and labor standards are 8 hours of labor at a standard wage rate of $10.6. During July, Regent Corporation produced 3,100 units. Materials purchased and used totaled 10,500 pounds at a total cost of $143,113. Payroll totaled $150,780 for 33,150 hours worked. Required: a. Calculate the direct materials price variance. Note: Do not round your intermediate calculations. Indicate the effect of variance by selecting "Favorable", "Unfavorable", or "None" for no effect (i.e., zero variance). b. Calculate the direct materials quantity variance. Note: Indicate the effect of variance by selecting "Favorable", "Unfavorable", or "None" for no effect (i.e., zero variance). c. Calculate the direct materials spending variance. Note: Indicate the effect of variance by selecting "Favorable", "Unfavorable", or "None" for no effect (i.e., zero variance). a. Price Variance b. Quantity Variance c. Spending Variance
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