Summit Manufacturing, Inc., has collected the following data on one of its products: ⚫ Direct materials standard: 2 kg @ $5/kg = $10 per finished unit • Total direct materials cost variance (unfavorable): $25,000 . Actual direct materials used: 85,000 kg Actual finished units produced: 40,000 units Calculate the price variance and quantity variance for direct materials.

Summit Manufacturing, Inc., has collected the following data on one of its products: ⚫ Direct materials standard: 2 kg @ $5/kg = $10 per finished unit • Total direct materials cost variance (unfavorable): $25,000 . Actual direct materials used: 85,000 kg Actual finished units produced: 40,000 units Calculate the price variance and quantity variance for direct materials.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter8: Standard Costs And Variances

Section: Chapter Questions

Problem 5PA: Ed Co. manufactures two types of O rings, large and small. Both rings use the same material but...

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Recompute the variances from the second Acme Inc. exercise using $0.0725 as the standard cost of the material and $14 as the standard labor cost per hour. How has your explanation of the variances changed?
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please solve and show full work with steps for better understanding Compute the direct materials variance, including its price and quantity variances. Note: Indicate the effect of each variance by selecting favorable, unfavorable, or no variance.
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