The standard cost of Product B manufactured by Crane Company includes 3 units of direct materials at $3.00 per unit. During June, 23,200 units of direct materials are purchased at a cost of $2.70 per unit, and 23,200 units of direct materials are used to produce 7,520 units of Product B. (a) Compute the total materials variance and the price and quantity variances. Total materials variance Materials price variance Materials quantity variance (b) Total materials variance $ Materials price variance $ Compute the total materials variance and the price and quantity variances, assuming the purchase price is $3.15 and the quantity purchased and used is 22,400 units. $ $ $ Materials quantity variance $ LA ◆
The standard cost of Product B manufactured by Crane Company includes 3 units of direct materials at $3.00 per unit. During June, 23,200 units of direct materials are purchased at a cost of $2.70 per unit, and 23,200 units of direct materials are used to produce 7,520 units of Product B. (a) Compute the total materials variance and the price and quantity variances. Total materials variance Materials price variance Materials quantity variance (b) Total materials variance $ Materials price variance $ Compute the total materials variance and the price and quantity variances, assuming the purchase price is $3.15 and the quantity purchased and used is 22,400 units. $ $ $ Materials quantity variance $ LA ◆
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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Please answer with formula and working,,. Please answer in text form without image
![**Materials Variance Analysis for Crane Company - Educational Overview**
The standard cost of Product B manufactured by Crane Company includes 3 units of direct materials at a price of $3.00 per unit. In June, a purchase of 23,200 units of direct materials was made at a cost of $2.70 per unit, with these units used to produce 7,520 units of Product B.
**(a) Calculation of Materials Variances:**
- **Objective:** Compute the total materials variance along with the price and quantity variances.
- **Total Materials Variance:**
- Input Field: $ [Blank for user input]
- **Materials Price Variance:**
- Input Field: $ [Blank for user input]
- **Materials Quantity Variance:**
- Input Field: $ [Blank for user input]
**(b) Alternative Scenario for Materials Variance Calculation:**
In this scenario, recalculation is needed under the assumption that the purchase price is adjusted to $3.15 per unit, and both purchase and usage are accounted for 22,400 units.
- **Objective:** Again, compute the total materials variance along with the price and quantity variances.
- **Total Materials Variance:**
- Input Field: $ [Blank for user input]
- **Materials Price Variance:**
- Input Field: $ [Blank for user input]
- **Materials Quantity Variance:**
- Input Field: $ [Blank for user input]
In the provided exercise, users are expected to fill in the blank fields with calculated values based on their understanding of variance analysis, which involves recognizing the difference between standard costs and actual costs to determine efficiency and cost-effectiveness.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9855cb7a-5db1-4294-9de9-4e629d51bb96%2F71e1baa1-e18a-48be-a618-23f41842193e%2Fpro2yjb_processed.jpeg&w=3840&q=75)
Transcribed Image Text:**Materials Variance Analysis for Crane Company - Educational Overview**
The standard cost of Product B manufactured by Crane Company includes 3 units of direct materials at a price of $3.00 per unit. In June, a purchase of 23,200 units of direct materials was made at a cost of $2.70 per unit, with these units used to produce 7,520 units of Product B.
**(a) Calculation of Materials Variances:**
- **Objective:** Compute the total materials variance along with the price and quantity variances.
- **Total Materials Variance:**
- Input Field: $ [Blank for user input]
- **Materials Price Variance:**
- Input Field: $ [Blank for user input]
- **Materials Quantity Variance:**
- Input Field: $ [Blank for user input]
**(b) Alternative Scenario for Materials Variance Calculation:**
In this scenario, recalculation is needed under the assumption that the purchase price is adjusted to $3.15 per unit, and both purchase and usage are accounted for 22,400 units.
- **Objective:** Again, compute the total materials variance along with the price and quantity variances.
- **Total Materials Variance:**
- Input Field: $ [Blank for user input]
- **Materials Price Variance:**
- Input Field: $ [Blank for user input]
- **Materials Quantity Variance:**
- Input Field: $ [Blank for user input]
In the provided exercise, users are expected to fill in the blank fields with calculated values based on their understanding of variance analysis, which involves recognizing the difference between standard costs and actual costs to determine efficiency and cost-effectiveness.
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