Purvis Manufacturing, which produces a single product, has prepared the following standard cost sheet for one unit of the product. Direct materials (6 pounds at $2 per pound) $12 Direct labor (2 hours at $12 per hour) $24 During the month of April, the company manufactures 300 units and incurs the following actual costs. Direct materials purchased and used (1,850 pounds) $4,070 Direct labor (620 hours) $7,130 Compute the total, price variance for materials. Indicate if the variance is (F) or (U) Materials price variance:
Purvis Manufacturing, which produces a single product, has prepared the following standard cost sheet for one unit of the product. Direct materials (6 pounds at $2 per pound) $12 Direct labor (2 hours at $12 per hour) $24 During the month of April, the company manufactures 300 units and incurs the following actual costs. Direct materials purchased and used (1,850 pounds) $4,070 Direct labor (620 hours) $7,130 Compute the total, price variance for materials. Indicate if the variance is (F) or (U) Materials price variance:
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 17P: Shinto Corp. uses a standard cost system and manufactures one product. The variable costs per...
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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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find materials price variance
Transcribed Image Text:Purvis Manufacturing, which produces a single product, has prepared the following standard cost sheet for one unit of the product.
Direct materials (6 pounds at $2 per pound)
$12
Direct labor (2 hours at $12 per hour)
$24
During the month of April, the company manufactures 300 units and incurs the following actual costs.
Direct materials purchased and used (1,850 pounds)
$4,070
Direct labor (620 hours)
$7,130
Compute the total, price variance for materials. Indicate if the variance is (F) or (U)
Materials price variance:
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