24.3 The cost accountant for Blue Pharmaceuticals has informed you that the company's materialsquantity variance for the drug Allegro was exactly equal to its materials price variance for theyear. The company's normal level of production is 80 batches of Allegro per year. However, dueto uncertainties regarding foundation funding, it produced only 60 batches during the current year.Other cost information regarding Allegro's direct materials is as follows.alsStandard price per gram of material$18Actual kilograms purchased and used during the year150 kgActual cost of materials purchased during the period .$2,700,000Number of grams per kilogram1,000 gramsCompute Blue's materials price variance.а.b. Compute the standard quantity of materials allowed per batch of Allegro produced.с.Why would you not expect Blue to have a large materials quantity variance?Gumcharo Corr

Variances mean the amount by which something changes or a difference between actual and estimated figures.a. Computation of Material Price Varianceb ) Calculation of standard quantity c) We would not expect a higher quantity variance because the price variance is nil.

Business

Accounting

The cost accountant for Blue Pharmaceuticals has informed you that the company's materials quantity variance for the drug Allegro was exactly equal to its materials price variance for the year. The company's normal level of production is 80 batches of Allegro per year. However, due to uncertainties regarding foundation funding, it produced only 60 batches during the current year. Other cost information regarding Allegro's direct materials is as follows. Standard price per gram of material $18 Actual kilograms purchased and used during the year 150 kg Actual cost of materials purchased during the period $2,700,000 Number of grams per kilogram 1,000 grams a. Compute Blue's materials price variance. b. Compute the standard quantity of materials allowed per batch of Allegro produced. c. Why would you not expect Blue to have a large materials quantity variance?

The cost accountant for Blue Pharmaceuticals has informed you that the company's materials quantity variance for the drug Allegro was exactly equal to its materials price variance for the year. The company's normal level of production is 80 batches of Allegro per year. However, due to uncertainties regarding foundation funding, it produced only 60 batches during the current year. Other cost information regarding Allegro's direct materials is as follows. Standard price per gram of material $18 Actual kilograms purchased and used during the year 150 kg Actual cost of materials purchased during the period $2,700,000 Number of grams per kilogram 1,000 grams a. Compute Blue's materials price variance. b. Compute the standard quantity of materials allowed per batch of Allegro produced. c. Why would you not expect Blue to have a large materials quantity variance?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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