Question

The standard cost of Product B manufactured by Blossom Company includes 3.3 units of direct materials at $5.40 per unit. During June, 26,800 units of direct materials are purchased at a cost of $5.30 per unit, and 26,800 units of direct materials are used to produce 8,000 units of Product B. (a) Compute the total materials variance and the price and quantity variances. Total materials variance $enter a dollar amount 520 select an option Favorable Materials price variance $enter a dollar amount 3500 select an option Unfavorable Materials quantity variance $enter a dollar amount select an option (b) Compute the total materials variance and the price and quantity variances, assuming the purchase price is $5.45 and the quantity purchased and used is 26,800 units. Total materials variance $enter a dollar amount select an option Materials price variance $enter a dollar amount select an option Materials quantity variance $enter a dollar amount

Answer 1

The total materials variance is $34,040 with an unfavorable materials price variance of -$2,680 and an unfavorable materials quantity variance of -$31,360.

Step-by-step explanation:

The total materials variance can be calculated by subtracting the actual cost of materials from the standard cost of materials:

Total materials variance = (Actual Quantity x Actual Price) - (Standard Quantity x Standard Price)

Given the information:

• Actual Quantity = 26,800 units
• Actual Price = $5.30 per unit
• Standard Quantity = 8,000 units
• Standard Price = $5.40 per unit

Plugging in these values, the total materials variance is ($142,040 - $108,000) = $34,040.

The materials price variance can be calculated by subtracting the actual price per unit from the standard price per unit and multiplying it by the actual quantity:

Materials price variance = (Actual Price - Standard Price) x Actual Quantity

Plugging in the values, the materials price variance is ($5.30 - $5.40) x 26,800 = -$2,680 (unfavorable).

The materials quantity variance can be calculated by subtracting the actual quantity used from the standard quantity and multiplying it by the standard price per unit:

Materials quantity variance = (Standard Quantity - Actual Quantity) x Standard Price

Plugging in the values, the materials quantity variance is (8,000 - 26,800) x $5.40 = -$31,360 (unfavorable).