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Acme Company's production budget for August is 18,500 units and includes the following component unit costs: direct materials, $9.00; direct labor, $11.00; variable overhead, $5.00. Budgeted fixed overhead is $42,000. Actual production in August was 20,250 units. Actual unit component costs incurred during August include direct materials, $9.20; direct labor, $10.40; variable overhead, $5.50. Actual fixed overhead was $44,500. The standard direct material cost per unit consists of 9 pounds of raw material at $1.00 per pound. During August, 207,000 pounds of raw material were used that were purchased at $0.90 per pound. Required: Calculate the materials price variance and materials usage variance for August. Note: Do not round Intermediate calculations. Indicate the effect of each varlance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (l.e., zero varlance). Material price variance Material usage variance F U None

Acme Company's production budget for August is 18,500 units and includes the following component unit costs: direct materials, $9.00; direct labor, $11.00; variable overhead, $5.00. Budgeted fixed overhead is $42,000. Actual production in August was 20,250 units. Actual unit component costs incurred during August include direct materials, $9.20; direct labor, $10.40; variable overhead, $5.50. Actual fixed overhead was $44,500. The standard direct material cost per unit consists of 9 pounds of raw material at $1.00 per pound. During August, 207,000 pounds of raw material were used that were purchased at $0.90 per pound. Required: Calculate the materials price variance and materials usage variance for August. Note: Do not round Intermediate calculations. Indicate the effect of each varlance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (l.e., zero varlance). Material price variance Material usage variance F U None

Principles of Cost Accounting
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter8: Standard Cost Accounting—materials, Labor, And Factory Overhead
Section: Chapter Questions
Problem 8P: Carlo Lee Corp. has established the following standard cost per unit: Although 10,000 units were...
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Acme Company's production budget for August is 18,500 units and includes the following component unit costs: direct materials, $9.00; direct labor, $11.00; variable overhead, $5.00. Budgeted fixed overhead is $42,000. Actual production in August was 20,250 units. Actual unit component costs incurred during August include direct materials, $9.20; direct labor, $10.40; variable overhead, $5.50. Actual fixed overhead was $44,500. The standard direct material cost per unit consists of 9 pounds of raw material at $1.00 per pound. During August, 207,000 pounds of raw material were used that were purchased at $0.90 per pound. Required: Calculate the materials price variance and materials usage variance for August. Note: Do not round Intermediate calculations. Indicate the effect of each varlance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (l.e., zero varlance). Material price variance Material usage variance F U None
Transcribed Image Text:Acme Company's production budget for August is 18,500 units and includes the following component unit costs: direct materials, $9.00; direct labor, $11.00; variable overhead, $5.00. Budgeted fixed overhead is $42,000. Actual production in August was 20,250 units. Actual unit component costs incurred during August include direct materials, $9.20; direct labor, $10.40; variable overhead, $5.50. Actual fixed overhead was $44,500. The standard direct material cost per unit consists of 9 pounds of raw material at $1.00 per pound. During August, 207,000 pounds of raw material were used that were purchased at $0.90 per pound. Required: Calculate the materials price variance and materials usage variance for August. Note: Do not round Intermediate calculations. Indicate the effect of each varlance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (l.e., zero varlance). Material price variance Material usage variance F U None
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