Patricia Rice, the controller, does not share the purchasing department's euphoria. She is fully aware of the following quarterly purchases of direct materials: First Third Fourth Second Quarter Quarter Quarter Quarter Quantity 5,000 5,000 5,000 25,000 Purchase price (per kilogram) $68.00 $69.00 $74.00 Required: 1. Calculate the direct materials purchase price variance for the fourth quarter and for the year. How much of each purchase price variance is attributable to changes in foreign currency exchange rates? (Do not round intermediate calculations.) Direct materials purchase-price variance for the 4th quarter Direct materials purchase-price variance for the year Price variance due to changes in exchange rate
Patricia Rice, the controller, does not share the purchasing department's euphoria. She is fully aware of the following quarterly purchases of direct materials: First Third Fourth Second Quarter Quarter Quarter Quarter Quantity 5,000 5,000 5,000 25,000 Purchase price (per kilogram) $68.00 $69.00 $74.00 Required: 1. Calculate the direct materials purchase price variance for the fourth quarter and for the year. How much of each purchase price variance is attributable to changes in foreign currency exchange rates? (Do not round intermediate calculations.) Direct materials purchase-price variance for the 4th quarter Direct materials purchase-price variance for the year Price variance due to changes in exchange rate
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter10: Evaluating Decentralized Operations
Section: Chapter Questions
Problem 2TIF
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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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