### Material Variance Analysis for Product BPharrell Company has set a standard cost for Product B, including 3.1 units of direct materials at $6.10 per unit. In June:- 26,900 units of direct materials were purchased at $5.85 per unit.- These 26,900 units were used to produce 8,500 units of Product B.#### (a) Variance Calculation**Objective:** Compute the total materials variance, and the price and quantity variances.- **Total Materials Variance:** - Formula: (Standard Cost - Actual Cost)- **Materials Price Variance:** - Formula: (Standard Price - Actual Price) x Actual Quantity- **Materials Quantity Variance:** - Formula: (Standard Quantity - Actual Quantity) x Standard Price**Enter the calculated variances:**- Total materials variance: $ [Input Field]- Materials price variance: $ [Input Field]- Materials quantity variance: $ [Input Field]#### (b) Adjusted Variance Calculation**Objective:** Compute the variances given:- Purchase price: $6.15- Quantity purchased and used: 26,800 units**Enter the recalculated variances:**- Total materials variance: $ [Input Field]- Materials price variance: $ [Input Field]- Materials quantity variance: $ [Input Field]These calculations assist in evaluating the efficiency and cost-effectiveness of material usage in production.

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Description: ### Material Variance Analysis for Product BPharrell Company has set a standard cost for Product B, including 3.1 units of direct materials at $6.10 per unit. In June:- 26,900 units of direct materials were purchased at $5.85 per unit.- These 26,900

Price variance is calculated by multiplying the number of actual units actually purchased by the actual unit cost of the item less its standard cost. The estimated or planned cost of an item based on engineering a. Total Materials Cost Variance = Actual Materials Cost - Standard Materials Cost = (26,900 units x $5.85 per unit) - (8,500 units x 3.1 per units x $6.10 per unit) = $157,365 - $160,735 = $3,370 Favorable Material price variance = (Actual price per pound - Standard price per pound)*Actual quantity purchased = ($5.85 per unit - $6.10 per unit) x 26,900 units = $6,725 Favorable Material quantity variance = (Actual quantity used - Standard quantity allowed)*Standard rate per pound = (26,900 units - 8,500 units x 3.1 per units) x $6.10 per unit = $3,355 Unfavorableb. Answer b) Total material variance =Standard cost -Actual cost=(11100 x 2.4 x 5.1) -(26600 x 5.15)=$1126 favourableMaterial price variance =(Standard price -Actual price ) x Actual quantity =(5.10 -5.15) x 26600=$1330 UnfavourableMaterial quantity variance =(Standard quantity -Actual quantity ) x Standard price =(11100 x 2.4 -26600) x 5.10=$204 Favourable

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The standard cost of Product B manufactured by Pharrell Company includes 3.1 units of direct materials at $6.10 per unit. During June, 26,900 units of direct materials are purchased at a cost of $5.85 per unit, and 26,900 units of direct materials are used to produce 8,500 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 $

The standard cost of Product B manufactured by Pharrell Company includes 3.1 units of direct materials at $6.10 per unit. During June, 26,900 units of direct materials are purchased at a cost of $5.85 per unit, and 26,900 units of direct materials are used to produce 8,500 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 $

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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