STI Industries manufactures two types of industrial staplers, small and regular. During October, STI purchased direct materials to produce its staplers. The quantity purchased equaled the quantity used. Related information for direct materials is as follows: Small Regular Direct materials Stapler Stapler Standard ounces per unit 12 c Standard price per ounce $2.00 $2.50 Actual quantity purchased (used) per unit a 16.75 Actual price per ounce $2.50 $2.80 Materials price variance $1,000 U $2,010 U Materials usage variance $800 F d Total materials variance b $1,260 U Number of units produced 200 400 Required: Complete the above table. That is, clearly label and show your detailed calculations of items a, b, c, and d.
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.
STI Industries manufactures two types of industrial staplers, small and regular. During October,
STI purchased direct materials to produce its staplers. The quantity purchased equaled the
quantity used. Related information for direct materials is as follows:
Small Regular
Direct materials Stapler Stapler
Standard ounces per unit 12 c
Standard price per ounce $2.00 $2.50
Actual quantity purchased (used) per unit a 16.75
Actual price per ounce $2.50 $2.80
Materials price variance $1,000 U $2,010 U
Materials usage variance $800 F d
Total materials variance b $1,260 U
Number of units produced 200 400
Required:
Complete the above table. That is, clearly label and show your detailed calculations of items a,
b, c, and d.
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