Question

Edwards Company manufactures a product with the following standard materials costs:
Material A ................................................... 30 pounds at $ 2.50 per pound
Material B ................................................... 40 pounds at $ 2.90 per pound
During the month of May, 18,000 pounds of material A were purchased at a cost of $ 2.76 per pound, of which 10,000 pounds were used in production. During the period, 20,000 pounds of material B were purchased at a cost of $ 2.98 per pound; 27,000 pounds were used in production. The actual production for the month of May was 500 units.
Required
A. Compute the direct materials price variance for each material.
B. Compute the direct materials usage variance for each material.
C. Compute the direct materials inventory variance for each material.
D. Interpret each of these variances and determine who is responsible for them.


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  • CreatedMarch 25, 2015
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