The following data relate to the direct materials cost for the production of automobile tires: Actual:...

Transcribed Image Text:

The following data relate to the direct materials cost for the production of automobile tires: Actual: 60,000 lbs. at $1.90 per lb. Standard: 61,800 lbs. at $1.85 per lb. a. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Direct Materials Price Variance Direct Materials Quantity Variance Total Direct Materials Cost Variance 60,000 X Unfavorable 1.85 X Favorable Favorable V. When the b. The direct materials price variance should normally be reported to the Purchasing Department V. When lower amounts of direct materials are used because of production efficiencies, the variance would be reported to the Production Supervisor favorable use of raw materials is caused by the purchase of higher-quality raw materials, the variance should be reported to the Purchasing Department . Feedback Check My Work Unfavorable variances can be thought of as increasing costs (a debit). Favorable variances can be thought of as decreasing costs (a credit). The direct material cost variance is the difference between the actual and standard material cost per quantity manufactured. The following data relate to the direct materials cost for the production of automobile tires: Actual: 60,000 lbs. at $1.90 per lb. Standard: 61,800 lbs. at $1.85 per lb. a. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Direct Materials Price Variance Direct Materials Quantity Variance Total Direct Materials Cost Variance 60,000 X Unfavorable 1.85 X Favorable Favorable V. When the b. The direct materials price variance should normally be reported to the Purchasing Department V. When lower amounts of direct materials are used because of production efficiencies, the variance would be reported to the Production Supervisor favorable use of raw materials is caused by the purchase of higher-quality raw materials, the variance should be reported to the Purchasing Department . Feedback Check My Work Unfavorable variances can be thought of as increasing costs (a debit). Favorable variances can be thought of as decreasing costs (a credit). The direct material cost variance is the difference between the actual and standard material cost per quantity manufactured.