Homework Answers
| Standard (100 litres) | Standard (18000 litres) | Mix | Actual (18000 litres) | ||||||||||
| Qty | Rate | Amount | Qty | Rate | Amount | Quantity | Qty | Rate | Amount | ||||
| X33 | 80 | $ 1.00 | $ 80.00 | 14400 | $ 1.00 | $ 14,400.00 | 13500 | 16200 | $ 1.00 | $ 16,200.00 | |||
| Z42 | 20 | $ 5.00 | $ 100.00 | 3600 | $ 5.00 | $ 18,000.00 | 4500 | 5400 | $ 5.09 | $ 27,500.00 | |||
| 18000 | $ 32,400.00 | 18000 | 21600 | $ 43,700.00 | |||||||||
| Price Variance = | (Standard Price - Actual Price) x Actual Quantity | ||||
| X33 | = | ($ 1 - 1) x 16200 | |||
| Z42 | = | ($ 5 - 5.09) x 5400 | $ 500.00 | ||
| Total | $ 500.00 | (Unfavorable) | |||
| Quantity Variance = | (Standard Quantity - Actual Quantity) x Standard Price | ||||
| X33 | = | (14400 - 16200) x $ 1 | $ 1,800.00 | (Unfavorable) | |
| Z42 | = | (3600 - 5400) x $ 5 | $ 9,000.00 | (Unfavorable) | |
| Total | $ 10,800.00 | (Unfavorable) | |||
| Mix Variance = | (Mix Quantity - Actual Quantity) x Standard Price | ||||
| X33 | = | (13500 - 16200) x $ 1 | $ 2,700.00 | (Unfavorable) | |
| Z42 | = | (4500 - 5400) x $ 5 | $ 4,500.00 | (Unfavorable) | |
| Total | $ 7,200.00 | (Unfavorable) | |||
| Yield Variance = | (Standard Quantity - Mix Quantity) x Standard Price | ||||
| X33 | = | (14400 - 13500) x $ 1 | $ 900.00 | (favorable) | |
| Z42 | (3600 - 4500) x $ 5 | $ 4,500.00 | (Unfavorable) | ||
| Total | $ 3,600.00 | (Unfavorable) | |||
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direct materials?
Usually management hires cost accountants.
Standard costs are established by repetitive process.
Management may have to consult purchase agents, product managers
and quality controls engineers.
Only engineers are required to set standard costs for direct
materials.
What are some of the causes of material variances?
Causes may be both internal and external.
Cause could be in the purchasing department.
Cause could arise from the supplier changing prices....
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