Solution-Calculate the material quantity variance

Calculate the material quantity variance

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Reference no: EM132767396

Problem - JIT variances - Natural Gardens makes recyclable pots for plants and uses JIT to manage inventories and production. The following are standards for a typical one-gallon pot:

Annual Material Standards
32 ounces of Component X x $0.02	$0.64
2 ounces of Component Y x $0.05	0.10
	$0.74
Current Material Standards
27 ounces of Component X x $0.02	$0.54
4 ounces of Component Y x $0.05	0.20
	$0.74

ln-house experiments indicated that changing the material standard would make the pots stronger, so the company issued an engineering change order for the product in February; this ECO established the current material standards. March production was 12,800 pots. Usage of raw material (all purchased at standard price) in March was 352,000 ounces of Component X and 49,600 ounces of Company Y.

Required - Calculate the material quantity variance and the engineering change order (ECO) material variance.

Reference no: EM132767396

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Calculate the material quantity variance

Reference no: EM132767396

Reference no: EM132767396

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