Mas - 6
Mas - 6
350
units, 400 units, $12, and $13 respectively, then the total budget variance is
$1,000 unfavorable
SUPPORTING CALCULATIONS: Total budget variance = (AQ × AP) − (SQ × SP) = (400 units × $13) − (350
units × $12) = $1,000 unfavorable
. AQ × (AP − SP)
actual quantity used and standard quantity allowed for actual production.
During June, 16,000 pounds of materials were purchased at a cost of $6 per pound. If there was a
favorable direct materials price variance of $3,000 in June, the standard cost per pound must be
$6.19
SUPPORTING CALCULATIONS: Standard cost for actual purchases made = (Actual quantity purchased ×
Actual price paid per unit purchased) + Favorable direct materials price variance = (16,000 pounds × $6)
+ $3,000 = $99,000 Standard cost per pound = Standard cost for actual purchases made / Actual quantity
purchased = $99,000 / 16,000 pounds = $6.19
actual and standard unit prices of an input multiplied by the actual quantity of inputs
Firecracker Company has developed the following standards for one of its products. Direct materials: 15
pounds × $16 per pound Direct labor: 4 hours × $24 per hour Variable manufacturing overhead: 4 hours
× $14 per hour The following activity occurred during the month of October: Materials purchased:
10,000 pounds costing $170,000 Materials used: 7,200 pounds Units produced: 500 units Direct labor:
2,300 hours at $23.60/hour Actual variable manufacturing overhead: $30,000 The company records
materials price variances at the time of purchase. The direct materials price variance is
$10,000 unfavorable