Sitka Industries uses a cost system that carries direct materials inventory at a standard cost. The controller has established these standards for one ladder (unit): Standard Quantity X Standard Price = Standard Cost Direct materials 3 pounds $4.50 per pound $13.50 Direct labor 2.00 hours $12.00 per hour $24.00 Total Cost $37.50 Sitka Industries made 3,000 ladders in July and used 8,800 pounds of material to make these units. Sitka Industries bought 15,500 pounds of material in the current period. There was a $250 unfavorable direct materials price variance. a. what if 9,500 pounds were used to make these ladders, what would be the direct materials quantity variance? b. if there was a $340 favorable direct materials price variance, how much did Sitka pay for the 15,500 pounds of material?
Sitka Industries uses a cost system that carries direct materials inventory at a
|
Standard Quantity X |
Standard Price = | Standard Cost | |
| Direct materials | 3 pounds | $4.50 per pound | $13.50 |
| Direct labor | 2.00 hours | $12.00 per hour | $24.00 |
| Total Cost | $37.50 |
Sitka Industries made 3,000 ladders in July and used 8,800 pounds of material to make these units. Sitka Industries bought 15,500 pounds of material in the current period. There was a $250 unfavorable direct materials price variance.
a. what if 9,500 pounds were used to make these ladders, what would be the direct materials quantity variance?
b. if there was a $340 favorable direct materials price variance, how much did Sitka pay for the 15,500 pounds of material?
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