Question

Wilson’s materials quantity variance for the current month was exactly one-half of its materials price variance. Both variances were unfavorable. The company’s cost accountant has supplied the following standard cost information:
Standard price per pound of materials . . . . . . . . . . . . . . . . . . . . . . . . . $15
Actual pounds purchased and used during the month . . . . . . . . . . . . 600 pounds
Actual cost per pound of materials purchased and used . . . . . . . . . . $16
Actual units manufactured during the month . . . . . . . . . . . . . . . . . . . 500 units
Normal productive output per month . . . . . . . . . . . . . . . . . . . . . . . . . . 550 units

Instructions
a. Compute Wilson’s materials price variance.
b. Compute the standard quantity of materials allowed for producing 550 units of product.
c. Record the journal entry to charge Work in Process for the cost of materials used during the month.
d. Assume Wilson’s overhead volume variance is twice the amount of its materials quantity variance. Is the volume variance favorable or unfavorable? How do you know?



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  • CreatedApril 17, 2014
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