Material Cost Variance: The difference between the standard cost of material specified and the actual cost of the material used is the Material Cost Variance. Material Cost Variance arises because of two reasons • Actual price of the material varies from the standard price and/or • Actual quantity of material used varies from the standard quantity. Therefore, Material Cost Variance is the sum of (i) Material Price Variance and (ii) Material Quantity Variance. The following formulas are used to calculate Material cost Variance: Material Cost Variance (MCV) = Material Price Variance (MPV) + Material Quantity Variance (MQV) Also Material Cost Variance (MCV) = Standard Cost – Actual Cost Material Cost Variance gives a view of deviations from the set standards, which can be either favorable or unfavorable To determine: Direct Material Cost Variance

Question

Want to see the full answer?

Answer 1

Question

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

Chapter 23, Problem 7QS

To determine

Concept Introduction:

Material Cost Variance: The difference between the standard cost of material specified and the actual cost of the material used is the Material Cost Variance. Material Cost Variance arises because of two reasons

• Actual price of the material varies from the standard price and/or

• Actual quantity of material used varies from the standard quantity.

Therefore, Material Cost Variance is the sum of (i) Material Price Variance and (ii) Material Quantity Variance.

The following formulas are used to calculate Material cost Variance:

Material Cost Variance (MCV) = Material Price Variance (MPV) + Material Quantity Variance (MQV)

Also Material Cost Variance (MCV) = Standard Cost – Actual Cost

Material Cost Variance gives a view of deviations from the set standards, which can be either favorable or unfavorable

To determine: Direct Material Cost Variance

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Please provide the accurate solution to this financial accounting question using valid calculations.

Don't use ai given answer accounting

Thurman Industries forecasts that total overhead for the current year will be $13,250,000 with 175,000 total machine hours. Year to date, the actual overhead is $8,420,000 and the actual machine hours are 89,000 hours. The predetermined overhead rate based on machine hours is _. (Round the factory overhead rate to the nearest dollar before multiplying by the number of hours.)

Answer 2

Question

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

Chapter 23, Problem 7QS

To determine

Concept Introduction:

Material Cost Variance: The difference between the standard cost of material specified and the actual cost of the material used is the Material Cost Variance. Material Cost Variance arises because of two reasons

• Actual price of the material varies from the standard price and/or

• Actual quantity of material used varies from the standard quantity.

Therefore, Material Cost Variance is the sum of (i) Material Price Variance and (ii) Material Quantity Variance.

The following formulas are used to calculate Material cost Variance:

Material Cost Variance (MCV) = Material Price Variance (MPV) + Material Quantity Variance (MQV)

Also Material Cost Variance (MCV) = Standard Cost – Actual Cost

Material Cost Variance gives a view of deviations from the set standards, which can be either favorable or unfavorable

To determine: Direct Material Cost Variance

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

Chapter 23, Problem 7QS

To determine

Concept Introduction:

Material Cost Variance: The difference between the standard cost of material specified and the actual cost of the material used is the Material Cost Variance. Material Cost Variance arises because of two reasons

• Actual price of the material varies from the standard price and/or

• Actual quantity of material used varies from the standard quantity.

Therefore, Material Cost Variance is the sum of (i) Material Price Variance and (ii) Material Quantity Variance.

The following formulas are used to calculate Material cost Variance:

Material Cost Variance (MCV) = Material Price Variance (MPV) + Material Quantity Variance (MQV)

Also Material Cost Variance (MCV) = Standard Cost – Actual Cost

Material Cost Variance gives a view of deviations from the set standards, which can be either favorable or unfavorable

To determine: Direct Material Cost Variance

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

Chapter 23, Problem 7QS

To determine