During the month of August, 16,000 units of materials having a standard cost of P0.40 a...

 

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During the month of August, 16,000 units of materials having a standard cost of P0.40 a unit were requisitioned for the production of 4,000 units of a product line. Standards reveal that 3 units of this material should be used for each unit of product manufactured. The total actual cost of the requisitioned materials amount to P6,880. REQUIRED: 1. Determine the material variances graphically and conceptually by formula. Exercise 6-3 Adam Processing Company has established a standard cost of P3 per unit for Material A and P7 for Material B. In December, the company purchased 10,000 units of Material A and 5,000 units of Material B. With the exception of 800 units of Material A, all Material A was purchased at the standard unit cost. The 800 units had a unit cost of P3.50. The company purchased 4,500 units of Material B at standard cost and 500 units at a unit cost of P8. According to the standards, two units of Material A and one unit of Material B should be used to manufacture each unit of Product 785. In January, 4,000 units of Product 785 were manufactured and 8,600 units of Material A were used and 4,100 units of Material B were used. REQUIRED: 1. Compute the materials variances for each of the two types of materials graphically and by formula. During the month of August, 16,000 units of materials having a standard cost of P0.40 a unit were requisitioned for the production of 4,000 units of a product line. Standards reveal that 3 units of this material should be used for each unit of product manufactured. The total actual cost of the requisitioned materials amount to P6,880. REQUIRED: 1. Determine the material variances graphically and conceptually by formula. Exercise 6-3 Adam Processing Company has established a standard cost of P3 per unit for Material A and P7 for Material B. In December, the company purchased 10,000 units of Material A and 5,000 units of Material B. With the exception of 800 units of Material A, all Material A was purchased at the standard unit cost. The 800 units had a unit cost of P3.50. The company purchased 4,500 units of Material B at standard cost and 500 units at a unit cost of P8. According to the standards, two units of Material A and one unit of Material B should be used to manufacture each unit of Product 785. In January, 4,000 units of Product 785 were manufactured and 8,600 units of Material A were used and 4,100 units of Material B were used. REQUIRED: 1. Compute the materials variances for each of the two types of materials graphically and by formula.

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