Smith Siding, LLC reported the following standards for direct materials for last year: Standard cost per pound............................$4.75 Standard amount per finished good...........8.5 pounds During the year, 460,000 finished goods were produced. The direct materials price variance was $14,200 unfavorable. The total direct materials variance was $980 favorable (assumed DM purchased equals DM used). Calculate the actual pounds of direct materials used for production. Select one: a. 3,910,000 lbs. b. 3,920,000 lbs. c. 3,906,804 lbs. d. 3,894,820 lbs. e. 3,964,200 lbs.
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.
Smith Siding, LLC reported the following standards for direct materials for last year:
Standard amount per finished good...........8.5 pounds
During the year, 460,000 finished goods were produced. The direct materials price variance was $14,200 unfavorable. The total direct materials variance was $980 favorable (assumed DM purchased equals DM used).
Calculate the actual pounds of direct materials used for production.
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