Sheridan Gold manufactures award medals. In August, Sheridan produced 5,900 medals, 105 more than expected. During the month, the company purchased 1,350 ounces of gold for $1,092,000. The standard price for the gold is $813 per ounce. The company actually used 1,212 ounces of gold for production.Calculate Sheridan’s direct materials price variance for the month. (If variance is zero, select "Not Applicable" and enter 0 for the amounts.) Direct material price variance $ UnfavorableNot ApplicableFavorable
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.
Sheridan Gold manufactures award medals. In August, Sheridan produced 5,900 medals, 105 more than expected. During the month, the company purchased 1,350 ounces of gold for $1,092,000. The standard price for the gold is $813 per ounce. The company actually used 1,212 ounces of gold for production.
Calculate Sheridan’s direct materials price variance for the month. (If variance is zero, select "Not Applicable" and enter 0 for the amounts.)
| Direct material price variance | $
|
UnfavorableNot ApplicableFavorable
|
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