Smith Industries uses a cost system that carries direct materials inventory at a standard cost. The controller has established these standards for the cost of one basket (unit):   NOTE: All dollar amounts are rounded to whole dollars and shown with "$" and commas as needed (i.e. $12,345). For the variance conditions, your answer is either "F” (for Favorable) or "U” (for Unfavorable) - capital letter and no quotes. Smith Industries made 3,000 baskets in July and used 15,500 pounds of material to make these units. Smith Industries paid $39,370 for the 15,500 pounds of material. Complete the following table of variances and their conditions: Variance Variance Amount Favorable (F) or Unfavorable (U) Material Price     Material Quantity     Total DM Cost Variance

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Smith Industries uses a cost system that carries direct materials inventory at a standard cost. The controller has established these standards for the cost of one basket (unit):

 

NOTE: All dollar amounts are rounded to whole dollars and shown with "$" and commas as needed (i.e. $12,345). For the variance conditions, your answer is either "F” (for Favorable) or "U” (for Unfavorable) - capital letter and no quotes.

Smith Industries made 3,000 baskets in July and used 15,500 pounds of material to make these units. Smith Industries paid $39,370 for the 15,500 pounds of material.

  • Complete the following table of variances and their conditions:
Variance Variance Amount Favorable (F) or Unfavorable (U)

Material Price

 

 

Material Quantity

 

 

Total DM Cost Variance

 

 

Standard
Cost
Standard
Standard
Quantity
Price
$2.60 per pound
$12.00 per hour
Direct materials
5 pounds
$18.00
Direct labor
1.25 hours
$15.00
Total prime cost
$33.00
II
Transcribed Image Text:Standard Cost Standard Standard Quantity Price $2.60 per pound $12.00 per hour Direct materials 5 pounds $18.00 Direct labor 1.25 hours $15.00 Total prime cost $33.00 II
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