Direct material variancessolving for price and usage variances. Fiberworks Company is a manufacturer of fiberglass toy boats.
Question:
Direct materials (fiberglass) purchased . . . . . . . 200,000 pounds
Direct materials issued into production . . . . . . . 180,000 pounds
Standard pounds allowed per boat . . . . . . . . . . . 1.75 pounds
Standard price per pound . . . . . . . . . . . . . . . . . . $7.00
Cost of fiberglass purchased . . . . . . . . . . . . . . . . $1,420,000
Required:
a. Calculate the actual cost per pound of fiberglass purchased during May.
b. Calculate the direct materials purchase price variance for May.
c. Calculate the direct materials usage variance for May.
d. Comment on calculating the material price variance based on pounds purchased rather than pounds issued into production.
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Related Book For
Accounting What the Numbers Mean
ISBN: 978-0078025297
10th edition
Authors: David H. Marshall, Wayne W. McManus, Daniel F. Viele
Question Posted: