LMN Company manufactures several consumer items for general household use. During the month of April, the company
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Question:
LMN Company manufactures several consumer items for general household use. During the month of April, the company manufactured 5,000 units using 12,000 pounds of material. The company purchased 14,000 pounds of material costing $21,000. According to the standard cost card, each unit requires 2.2 pounds, at a cost of $1.40 per pound.
Required: Compute the:
i. material price variance and state whether the variance is favourable or adverse.
ii. material usage variance and state whether the variance is favourable or adverse.
Related Book For
Accounting What the Numbers Mean
ISBN: 978-0073527062
9th Edition
Authors: David H. Marshall, Wayne W. McManus, Daniel F. Viele,
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