Managerial Accounting
Managerial Accounting
17th Edition
ISBN: 9781260247787
Author: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
Publisher: RENT MCG
bartleby

Concept explainers

bartleby

Videos

Question
Book Icon
Chapter IE, Problem 1IE
To determine

To calculate: The spending variance for June

Expert Solution
Check Mark

Answer to Problem 1IE

Solution: The spending variance for June is $8 Favorable

Explanation of Solution

The spending variance for June is calculated as follows:

    Actual Cost per unit (A) (2632/1100) $ 2.3927
    Standard Cost per unit (B) 2.4
    Actual Units (C) 1100
    Spending Variance (A-B)*C = $ 8 Favorable
Conclusion

The spending variance for June is $8 Favorable

Requirement-3:

To determine

To calculate: The material price, quantity and spending variances

Expert Solution
Check Mark

Answer to Problem 1IE

Solution: The material price, quantity and spending variances are as follows:

    Direct Material Price Variance $ 188 Favorable
    Direct Material Quantity Variance $ 180 Unfavorable
    Material Spending Variance $ 8 Favorable

Explanation of Solution

The material price, quantity and spending variances are calculated as follows:

    Material Price Variance:
    Actual Price (A) (2632/9400) $ 0.28 Per Ounce
    Standard Price (B) $ 0.30 Per Ounce
    Actual Quantity (C) 9400 Pounds
    Material Price Variance = (A-B)*C = $ 188 Favorable
    Material Quantity Variance:
    Actual Quantity (A) 9400 Ounces
    Standard Quantity (B) (1100 units *8 ounces) 8800 Ounces
    Standard Price (C) $ 0.30 Per Ounce
    Material Quantity Variance = (A-B)*C = $ 180 Unfavorable
    Material Spending Variance (188-180) $ 8 Favorable
Conclusion

Hence material spending variance is the sum of Material Quantity Variance and Material Quantity Variance.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Knowledge Booster
Background pattern image
Accounting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
Text book image
FINANCIAL ACCOUNTING
Accounting
ISBN:9781259964947
Author:Libby
Publisher:MCG
Text book image
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Text book image
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Text book image
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Text book image
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Text book image
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education
What is variance analysis?; Author: Corporate finance institute;https://www.youtube.com/watch?v=SMTa1lZu7Qw;License: Standard YouTube License, CC-BY