Purchase Solution

Computing material price variance, etc

Not what you're looking for?

Ask Custom Question

The cost accountant for Blue Pharmaceuticals has informed you that the company's materials quantity variance for the drug Allegro was exactly equal to its materials price variance for the year. The company's normal level of production is 50 batches of Allegro per year. However due to uncertainties regarding the foundation funding, it produced only 25 batches during the current year. Other cost information regarding Allegros direct materials is as follows:
Standard price per gram of material........................................................$60
Actual kilograms purchased and used during the year.............................100kg
Actual cost of materials purchased during the period.............................$6,000,000
Number of grams per kilogram.................................................................1,000 grams

A- Compute Blues materials price variance
B- Compute the standard quantity of materials allowed per batch of Allegro produced
C- Why would you not expect Blue to have a large materials quantity variance?

Purchase this Solution

Solution Summary

The expert computes material price variances.

Solution Preview

Please see attachment.

COMPUTING MATERIAL PRICE VARIANCE

The cost accountant for Blue Pharmaceuticals has informed you that the company's materials quantity variance for the drug Allegro was exactly equal to its materials price variance for the year. The company's normal level of production is 50 batches of Allegro per year. However due to uncertainties regarding the foundation funding, it produced only 25 batches during the current year.

Other cost information regarding Allegros direct materials is as follows:
Standard price per ...

Solution provided by:
Education
  • B. Sc., University of Nigeria
  • M. Sc., London South Bank University
Recent Feedback
  • "Thank you."
  • "thank you Chidi Ngene.. if you have any APA references would be great"
  • "Thank you so much for your help, your explanations were easy to understand and apply!"
  • "are you able to highlight the equations used either on the xlsx or a word doc as to how each graph was formed- overall looks fine i just need help understanding this myself"
  • "Chidi Ngene, M. Sc. Was extremely helpful as without the help and guidance I would have failed, but with the help I passed. I still have a lot to learn and in need of the guidance to understand and learn more on the subject. I would recommend Chidi Ngene and BrainMass to anyone that are in need of help. Thank you!!"
Purchase this Solution


Free BrainMass Quizzes
Measures of Central Tendency

This quiz evaluates the students understanding of the measures of central tendency seen in statistics. This quiz is specifically designed to incorporate the measures of central tendency as they relate to psychological research.

Terms and Definitions for Statistics

This quiz covers basic terms and definitions of statistics.

Know Your Statistical Concepts

Each question is a choice-summary multiple choice question that presents you with a statistical concept and then 4 numbered statements. You must decide which (if any) of the numbered statements is/are true as they relate to the statistical concept.

Measures of Central Tendency

Tests knowledge of the three main measures of central tendency, including some simple calculation questions.