Mary Clarke is concerned about her performance as a recently employed purchasing agent. The
Accounting Department has provided her with the following performance data for the month of
August:
Units produced . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000
Materials used . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,078 tons
Materials purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,400 tons at $43 per ton
The standard materials usage set by management for one unit of product is half a ton of materials per unit, at $45 per ton. Her performance report shows the following variances:
Used (1,078 tons – 1,000 tons standard) × $45 per ton . . . . . . . . . . . . . . . . . . . . . . . . . . $3,510 U
Purchased ($45 per ton standard – $43 per ton actual) × 1,400 tons. . . . . . . . . . . . . . . . . .2,800 F
If you were Mary Clarke, how would you explain this report?