Chapter 8, Problem 7EB

Woodpecker manufactures sawmill equipment. They use a standard Costing system and recognize material price variance at the time of material purchases. They use carbide to make the teeth on their band-saw blades. They received an order for 250 band-saw blades, but they did not have any carbide in stock. They purchased 3,500 pounds of carbide for $14,875 but should have spent $16,275. Each saw blade has a standard carbide direct materials quantity of 7.8 pounds.

A. If they used 8 pounds per blade, what would be the direct materials quantity variance?

B. If they used 7.5 pounds per blade, what would be the direct materials quantity variance?

C. Compute the direct materials price variance based on 7.5 pounds of carbide per blade actually used.