Direct material variances: Direct material variances refer to the difference between the standard direct material cost and actual direct material cost incurred. Direct material cost variances are categorized into following two categories: Direct material Rate variance : This variance shows the difference of standard rate and actual rate of material. The formula to calculate this variance is as follows: Direct material rate variance = ( Actual rate – Standard rate ) × Actual Quantity Direct material usage variance: This variance shows the difference of standard usage and actual usage of material. The formula to calculate this variance is as follows: Direct material usage variance = ( Actual Quantity – Standard Quantity ) × Standard rate Direct material cost variance: This variance shows the difference of standard cost and actual cost of material. The formula to calculate this variance is as follows: Direct material cost variance = Direct material rate variance + Direct material usage variance To Calculate: The Material Quantity Variance for March.

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Answer 1

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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 9, Problem 2F15

To determine

Concept Introduction:

Direct material variances: Direct material variances refer to the difference between the standard direct material cost and actual direct material cost incurred. Direct material cost variances are categorized into following two categories:

Direct material Rate variance: This variance shows the difference of standard rate and actual rate of material. The formula to calculate this variance is as follows:

Direct material rate variance = (Actual rate – Standard rate) ×Actual Quantity

Direct material usage variance:This variance shows the difference of standard usage and actual usage of material. The formula to calculate this variance is as follows:

Direct material usage variance = (Actual Quantity – Standard Quantity)×Standard rate

Direct material cost variance:This variance shows the difference of standard cost and actual cost of material. The formula to calculate this variance is as follows:

Direct material cost variance = Direct material rate variance + Direct material usage variance

To Calculate:The Material Quantity Variance for March.

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[The following information applies to the questions displayed below.] Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labour-hours, and its standard costs per unit are as follows: Direct materials: 5 kg at $10.00 per kg Direct labour: 2 hours at $15 per hour Variable overhead: 2 hours at $5 per hour Total standard cost per unit The company planned to produce and sell 32,000 units in March. However, during March the company actually produced and sold 37,600 units and incurred the following costs: a. Purchased 200,000 kg of raw materials at a cost of $9.40 per kg. All of this material was used in production. b. Direct labour: 75,000 hours at a rate of $16 per hour. c. Total variable manufacturing overhead for the month was $558,750. 7. What is the variable overhead spending variance for March? (Do not round intermediate calculations. Round the actual overhead rate to two decimal places. Indicate the effect of each…

Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labour-hours, and its standard costs per unit are as follows: Direct materials: 5 kg at $10.00 per kg Direct labour: 2 hours at $15 per hour Variable overhead: 2 hours at $5 per hour Total standard cost per unit The company planned to produce and sell 32,000 units in March. However, during March the company actually produced and sold 37,600 units and incurred the following costs: a. Purchased 200,000 kg of raw materials at a cost of $9.40 per kg. All of this material was used in production. b. Direct labour: 75,000 hours at a rate of $16 per hour. c. Total variable manufacturing overhead for the month was $558,750. 5. What is the labour rate variance for March? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.). Do not round intermediate calculations.) Labour rate variance

Required information [The following information applies to the questions displayed below.] Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labour-hours, and its standard costs per unit are as follows: Direct materials: 5 kg at $10.00 per kg Direct labour: 2 hours at $15 per hour Variable overhead: 2 hours at $5 per hour Total standard cost per unit $50.00 30.00 10.00 $90.00 The company planned to produce and sell 32,000 units in March. However, during March the company actually produced and sold 37,600 units and incurred the following costs: a. Purchased 200,000 kg of raw materials at a cost of $9.40 per kg. All of this material was used in production. b. Direct labour: 75,000 hours at a rate of $16 per hour. c. Total variable manufacturing overhead for the month was $558,750. 1. What is the materials price variance for March? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable,…

Answer 2

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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 9, Problem 2F15

To determine

Concept Introduction:

Direct material variances: Direct material variances refer to the difference between the standard direct material cost and actual direct material cost incurred. Direct material cost variances are categorized into following two categories:

Direct material Rate variance: This variance shows the difference of standard rate and actual rate of material. The formula to calculate this variance is as follows:

Direct material rate variance = (Actual rate – Standard rate) ×Actual Quantity

Direct material usage variance:This variance shows the difference of standard usage and actual usage of material. The formula to calculate this variance is as follows:

Direct material usage variance = (Actual Quantity – Standard Quantity)×Standard rate

Direct material cost variance:This variance shows the difference of standard cost and actual cost of material. The formula to calculate this variance is as follows:

Direct material cost variance = Direct material rate variance + Direct material usage variance

To Calculate:The Material Quantity Variance for March.

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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 9, Problem 2F15

To determine

Concept Introduction:

Direct material variances: Direct material variances refer to the difference between the standard direct material cost and actual direct material cost incurred. Direct material cost variances are categorized into following two categories:

Direct material Rate variance: This variance shows the difference of standard rate and actual rate of material. The formula to calculate this variance is as follows:

Direct material rate variance = (Actual rate – Standard rate) ×Actual Quantity

Direct material usage variance:This variance shows the difference of standard usage and actual usage of material. The formula to calculate this variance is as follows:

Direct material usage variance = (Actual Quantity – Standard Quantity)×Standard rate

Direct material cost variance:This variance shows the difference of standard cost and actual cost of material. The formula to calculate this variance is as follows:

Direct material cost variance = Direct material rate variance + Direct material usage variance

To Calculate:The Material Quantity Variance for March.

Expert Solution & Answer

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Check out a sample textbook solution

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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 9, Problem 2F15

To determine