Material Price Variance
Not what you're looking for?
Pardoe, Inc., manufactures a single product in which variable manufacturing overhead is assigned on the basis of direct labor hours. The company uses a standard cost system and has established the following standards for one unit of product:
Standard Standard Price Standard
Quantity or Rate Cost
Direct materials 1.5 pounds $3.00 per pound $4.50
Direct labor 0.6 hours $6.00 per hour $3.60
Variable manufacturing overhead 0.6 hours $1.25 per hour $0.75
During March, the following activity was recorded by the company:
- The company produced 3,000 units during the month.
- A total of 8,000 pounds of material were purchased at a cost of $23,000.
- There was no beginning inventory of materials on hand to start the month; at the end of the month, 2,000 pounds of material remained in the warehouse.
- During March, 1600 direct labor hours were worked at a rate of $6.50 per hour.
- Variable manufacturing overhead costs during March totaled $1,800.
Reference: 10-4
The materials price variance for March is:
$750 F
$1,000 U
$1,000 F
$750 U
Purchase this Solution
Solution Summary
The solution explains the calculation of material price variance
Purchase this Solution
Free BrainMass Quizzes
Motivation
This tests some key elements of major motivation theories.
Writing Business Plans
This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.
Six Sigma for Process Improvement
A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.
Employee Orientation
Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.
Organizational Leadership Quiz
This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.