cost system to account for the costs of its one product. Standards are 4.0 sheets of ½ inch steel at $11 and 14.1 hours of labor at a standard wage rate of $13. During July, Basil Tooling produced 610 units. Materials purchased and ed totaled2,590 sheets at a total cost of $275,490. Payroll totaled $113,410 for 8,820 hours worked. Calculate the direct materials price variance. (Do not round your intermediate calculations. Indicate the effect of variance by lecting "Favorable", "Unfavorable", or "None" for no effect (i.e., zero variance).) rice Variance Favorable None Unfavorable Calculate the direct materials quantity variance. (Indicate the effect of variance by selecting "Favorable", "Unfavorable", or" er no effect (i.e., zero variance).) Quantity Variance
cost system to account for the costs of its one product. Standards are 4.0 sheets of ½ inch steel at $11 and 14.1 hours of labor at a standard wage rate of $13. During July, Basil Tooling produced 610 units. Materials purchased and ed totaled2,590 sheets at a total cost of $275,490. Payroll totaled $113,410 for 8,820 hours worked. Calculate the direct materials price variance. (Do not round your intermediate calculations. Indicate the effect of variance by lecting "Favorable", "Unfavorable", or "None" for no effect (i.e., zero variance).) rice Variance Favorable None Unfavorable Calculate the direct materials quantity variance. (Indicate the effect of variance by selecting "Favorable", "Unfavorable", or" er no effect (i.e., zero variance).) Quantity Variance
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter10: Standard Costing And Variance Analysis
Section: Chapter Questions
Problem 72P: Moleno Company produces a single product and uses a standard cost system. The normal production...
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Concept explainers
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Basil Tooling uses a standard cost system to account for the costs of its one product. Standards are 4.0 sheets of ½ inch steel at $11
per sheet and 14.1 hours of labor at a standard wage rate of $13. During July, Basil Tooling produced 610 units. Materials purchased and
used totaled 2,590 sheets at a total cost of $275,490. Payroll totaled $113,410 for 8,820 hours worked.
a. Calculate the direct materials price variance. (Do not round your intermediate calculations. Indicate the effect of variance by
selecting "Favorable", "Unfavorable", or "None" for no effect (I.e., zero variance).)
Price Variance
Favorable
None
Unfavorable
b. Calculate the direct materials quantity variance. (Indicate the effect of variance by selecting "Favorable", "Unfavorable", or "None"
for no effect (i.e., zero variance).)
www
Quantity Variance
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