Question

Conceal? Corp. makes sheer wraparound bathing suit cover-ups. During April 2009, the company purchased and used 7,560 yards of material at $7.50 per yard. Each cover-up requires 1.5 yards of material; the standard material cost is $7.30per yard. During April, the company produced 5,000 cover-ups.
Required:
(a) What is the standard quantity of material allowed for the actual production?
(b) Compute the material price and quantity variances.
(c) Why might the actual price of a raw material be greater than the standard price set for the material? How might Conceal? Corp.’s management try to contain the cost of raw material?


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  • CreatedMarch 27, 2015
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