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Required. Compute the direct materials price and quantity variances for the month. (Indicate the effect of each variance by selecting "F" fo favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).) Materials price variance Materials quantity variance 1,500 F 4,080 U

Required. Compute the direct materials price and quantity variances for the month. (Indicate the effect of each variance by selecting "F" fo favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).) Materials price variance Materials quantity variance 1,500 F 4,080 U

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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The direct materials and direct labour standards for one bottle of Clean-All spray cleaner are given below: Standard Price or Rate: $0.34 per millilitre $12.00 per hour Direct materials Direct labour Standard Quantity or Hours 6.0 millilitres 0.3 hours During the most recent month, the following activity was recorded: a. 30,000 millilitres of material was purchased at a cost of $0.29 per millilitre. b. All of the material was used to produce 3,480 bottles of Clean-All. c. 775 hours of direct labour time was recorded at a total labour cost of $9,300. Materials price variance Materials quantity variance Standard Cost Assume that instead of producing 3,480 bottles of Clean-All during the month, the company produced only 2,000 bottles, using 26,000 millilitres of material. (The rest of the material purchased remained in raw materials inventory.) $2.04 $3.60 Required: Compute the direct materials price and quantity variances for the month. (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).) $ 1,500 S 4,080 U
Transcribed Image Text:The direct materials and direct labour standards for one bottle of Clean-All spray cleaner are given below: Standard Price or Rate: $0.34 per millilitre $12.00 per hour Direct materials Direct labour Standard Quantity or Hours 6.0 millilitres 0.3 hours During the most recent month, the following activity was recorded: a. 30,000 millilitres of material was purchased at a cost of $0.29 per millilitre. b. All of the material was used to produce 3,480 bottles of Clean-All. c. 775 hours of direct labour time was recorded at a total labour cost of $9,300. Materials price variance Materials quantity variance Standard Cost Assume that instead of producing 3,480 bottles of Clean-All during the month, the company produced only 2,000 bottles, using 26,000 millilitres of material. (The rest of the material purchased remained in raw materials inventory.) $2.04 $3.60 Required: Compute the direct materials price and quantity variances for the month. (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).) $ 1,500 S 4,080 U
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