Chapter 23, Problem 13E

Exercise 23-13 Computing and interpreting materials variances P3
Hart Company made 3,000 bookshelves using 22,000 board feet of wood costing $266,200. The company's direct materials standards for one bookshelf are 8 board feet of wood at $12 per board foot.

1. Compute the direct materials price and quantity variances and classify each as favorable or unfavorable.
2. Hart applies management by exception by investigating direct materials variances of more than 5% of actual direct materials costs. Which direct materials variances will Hart investigate further?

Check Price variance, $2,200 U