Explore BrainMass

Explore BrainMass

    Cole laboratories makes and sells a lawn fertilizer called Fastgro

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Cole laboratories makes and sells a lawn fertilizer called Fastgro. The company has developed standard costs for one bag of Fastgro as follows:
    Standard
    Standard Quantity Cost per Bag
    Direct material 20 pounds $8.00
    Direct labor 0.1 hours 1.10
    Variable manuf. overhead 0.1 hours .40

    The company had no beginning inventories of any kind on Jan. 1. Variable manufacturing overhead is applied to production on the basis of direct labor hours. During January, the following activity was recorded by the company:

    Production of Fastgro: 4,000 bags
    Direct materials purchased: 85,000 pounds at a cost of $32,300
    Direct labor worked: 390 hours at a cost of $4,875
    Variable manufacturing overhead incurred: $1,475
    Inventory of direct materials on Jan. 31: 3,000 pounds

    22. The materials price variance for January is:
    A) $1,640 F.
    B) $1,640 U.
    C) $1,700 F.
    D) $1,300 U.
    Could you please define what CMPV is?

    CMPV = (.38-.40) 85000=1700F

    Also what exactly is this second calulations for?

    AP=32300/85000, SP = 8.00/20lbs

    I have prepared the following: Check my work please!

    (Cost of Materials Price Variable) CMPV = (.38-.40) 85000=1700F

    (.38-.40) =-.0.2*85000=-1700 or (1700)

    (The bottom calculation helped me get my top calculation)

    AP=32300/85000= .38 Direct materials purchased: 85,000 pounds at a cost of $32,300

    SP = 8.00/20lbs=.40 Direct material 20 pounds $8.00

    © BrainMass Inc. brainmass.com June 4, 2020, 2:40 am ad1c9bdddf
    https://brainmass.com/business/accounting/cole-laboratories-makes-sells-lawn-fertilizer-called-fastgo-472800

    Solution Preview

    MPV = (AP - SP) AQ
    Where,
    MPV is Material Price Variance
    AP is Actual unit price of materials
    SP is Standard unit price of materials
    AQ is Actual quantity of materials purchased
    In the given question the data ...

    Solution Summary

    The expert examines Cold laboratories making and selling lawn fertilizers called Fastgo.

    $2.19

    ADVERTISEMENT