Question

1. A furniture company uses sunmica tops for tables. It provides the following data: St. Quantity for sunmica per table 4 sq.ft St. price per sq. ft of sunmica AED 5 Actual prod. Of tables 1000 Sunmica actually used 4,300 sq.ft Actual purchase price per sq. ft AED 5.50. You are required to calculate Material variances. 2. From the following information calculate (i) material cost variance (ii) material price variance (iii) Material Usage variance Quantity of material purchased 3000 units Value of material purchased AED. 9000 St. quantity of raw material req. p.u. 25 units Standard rate of material unit AED 2 per Opening stock of material Nil Closing stock of material 500 units Finished production during the period 80 units

Answer 1

Statement showing Computations
	Standard			Actual
Particulars	Quantity	Rate	amount	Quantity	Rate	amount
Materials	4,000.00	5.00	20,000.00	4,300.00	5.50	23,650.00
Actual output	1,000.00
Materials reqd (1000*4)	4,000.00
Direct Material cost variance = Standard cost - Actual cost
DMCV = 20,000 - 23,650
DMCV = 3,650 U
Direct Material Price Variance = (SP-AP)*AQ purchased
DMPV = (5 - 5.5)4300
DMPV = 2,150 U
Direct Material Quantity Variance = (SQ-AQ)SP
DMQV= (4000 - 4300)*5
DMQV= 1,500 U