The cost analyst for Sheffer Systems collected the following data concerning direct materials: Actual production 36,100 units Direct materials purchased (actual) Standard cost of materials purchased Standard direct materials costs per unit produced Standard price times actual amount of materials used Required: Compute the direct materials cost variances. Note: Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option. Direct Materials Price variance $ 716,500 720,300 17 628,200 Efficiency variance Total direct materials cost variance

The cost analyst for Sheffer Systems collected the following data concerning direct materials: Actual production 36,100 units Direct materials purchased (actual) Standard cost of materials purchased Standard direct materials costs per unit produced Standard price times actual amount of materials used Required: Compute the direct materials cost variances. Note: Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option. Direct Materials Price variance $ 716,500 720,300 17 628,200 Efficiency variance Total direct materials cost variance

Name: The cost analyst for Sheffer Systems collected the following data con
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Description: The cost analyst for Sheffer Systems collected the following data concerning direct materials:Actual production36,100 unitsDirect materials purchased (actual)Standard cost of materials purchasedStandard direct materials costs per unit producedStanda

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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Concept explainers

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.

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Question

The cost analyst for Sheffer Systems collected the following data concerning direct materials:
Actual production
36,100 units
Direct materials purchased (actual)
Standard cost of materials purchased
Standard direct materials costs per unit produced
Standard price times actual amount of materials used
Required:
Compute the direct materials cost variances.
Note: Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select
either option.
Direct Materials
Price variance
Efficiency variance
Total direct materials cost variance
$ 716,500
720,300
17
628,200
F

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