Question

HOW DO I CALCULATE?

Hart Company made 3,240 bookshelves using 22,240 board feet of wood costing $295,792. The company's direct materials standards for one bookshelf are 8 board feet of wood at $13.20 per board foot. AQ = Actual Quantity SQ = Standard Quantity AP = Actual Price SP = Standard Price (1) Compute the direct materials price and quantity variances and classify each as favorable or unfavorable. (2) Hart applies management by exception by investigating direct materials variances of more than 5% of actual direct materials costs. Which direct materials variances will Hart investigate further? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the direct materials price and quantity variances and classify each as favorable or unfavorable. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance.) Actual Cost Standard Cost $ 0 $ 0 01 $

Answer 1

Actual Cost X I AQ 22240 AP 13.30 AQ 22240 X / x 293568 SP 13.20 Standard Cost SO X 25920 x 342144 SP 13.20 295792 2224 48576 Direct Material Price Varaince Direct Material Quantity Varaince Total Direct Material Varaince 3240*8 2224 48576 46352 Unfavorable Favorable Favorable SQ 25920 Which Direct Material Varaince Will Hart Investigate Direct Material Price Varaince