Question

Acoma, Inc., has determined a standard direct materials cost per unit of $6.20 (2 feet x $3.10 per foot). Last month, Acoma purchased and used 4,280 feet of direct materials for which it paid $12,840. The company produced and sold 2,000 units during the month. Calculate the direct materials price, quantity, and spending variances. (Round your intermediate calculations to 2 decimal places. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable.) Direct Materials Price Variance Direct Materials Quantity Variance Direct Materials Spending Variance

Answer 1

Answers

• Variances, with calculations

[1]

Material Price Variance
(	Standard Rate	-	Actual Rate	)	x	Actual Quantity
(	$                                3.10	-	$                       3.00	)	x	4280
	428
	Variance		$                  428.00			Favourable-F

[2]

Material Quantity Variance
(	Standard Quantity	-	Actual Quantity	)	x	Standard Rate
(	4000	-	4280	)	x	$                           3.10
	-868
	Variance		$                  868.00			Unfavourable-U

[3]

Material Spending Variance
(	Standard Cost	-	Actual Cost	)
(	$                      12,400.00	-	$            12,840.00	)
	-440
	Variance		$                  440.00			Unfavourable-U