Simba Company’s standard materials cost per unit of output is $9.40 (2.00 pounds x $4.70). During July, the company purchases and uses 3,080 pounds of materials costing $16,632 in making 1,400 units of finished product. Compute the total, price, and quantity materials variances. (Round per unit values to 2 decimal places, e.g. 52.75 and final answers to 0 decimal places, e.g. 52.) Total materials variance $enter a dollar amount rounded to 0 decimal places select an option UnfavorableNeither favorable nor unfavorableFavorable Materials price variance $enter a dollar amount rounded to 0 decimal places select an option Neither favorable nor unfavorableFavorableUnfavorable Materials quantity variance $enter a dollar amount rounded to 0 decimal places select an option UnfavorableFavorableNeither favorable nor unfavorable
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.
Simba Company’s
Compute the total, price, and quantity materials variances. (Round per unit values to 2 decimal places, e.g. 52.75 and final answers to 0 decimal places, e.g. 52.)
| Total materials variance |
$enter a dollar amount rounded to 0 decimal places
|
select an option UnfavorableNeither favorable nor unfavorableFavorable | ||
|---|---|---|---|---|
| Materials price variance |
$enter a dollar amount rounded to 0 decimal places
|
select an option Neither favorable nor unfavorableFavorableUnfavorable | ||
| Materials quantity variance |
$enter a dollar amount rounded to 0 decimal places
|
select an option UnfavorableFavorableNeither favorable nor unfavorable |
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