Question

Direct material variances In addition to the information for Acme Company in Mini-Exercises 15.1 and 15.2, the standard direct material cost per unit consists of 10 pounds of raw material at $0.80 per pound. During August, 198,000 pounds of raw material were used that were purchased at $0.75 per pound.
In Mini-Exercise 15.1, Acme Company's production budget for August is 17,500 units and includes the following component unit costs: direct materials, $8; direct labor, $10; variable overhead, $6. Budgeted fixed overhead is $32,000. Actual production in August was 18,000 units.
In Mini-Exercise 15.2, In addition to the information for Acme Company in Mini-Exercise 15.1, actual unit component costs incurred during August include direct materials, $8.25; direct labor, $9.45; variable overhead, $6.82. Actual fixed overhead was $33,500.

Required:
Calculate the materials price variance and materials usage variance for August.



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  • CreatedOctober 07, 2013
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