Reference no: EM131821970
Questions -
1. Direct Material variances - During April 2003, the purchasing agent bought 12,800 pounds of scrap iron at $.89 per pound. Each set requires a standard quantity of 35 pounds at a standard cost of $.85 per pound. During April, the company used 10,700 pounds and produced 300 sets
A: For April, compare the direct material price variance (based on the quantity purchased) and the direct material quantity variance.
B: Identify the titles of individuals in the firm who would be responsible for each of the variances.
C: Identify some potential explanations for the variances computed in part (a).
2. Direct material variances - In August 2002, Best Publishing company's costs and quantities of paper consumed in manufacturing its 2003 executive planner and Calendar were as follow:
Actual Unit Purchase Price $0.14 per page
Standard quantity allowed for good production 195,800 pages
Actual quantity purchased during August 230,000 pages
Actual quantity used in August 200,000 pages
Standard unit price $0.15 per page
A: Calculate the total cost of purchases for August.
B: Compare the material price variance (based on quantity purchased)
C: Calculate the material quantity variance.
3. Direct labor variances - Teller Prefabricated Walls builds standard prefabricated wooden frames for apartment walls. The standard quantity of direct labor is 5 hours for each frame at an average standard hourly wage of $22. During May the carpenters worked 3,100 hours and earned $69,750.
A: What were the standard hours allowed for May construction?
B: Calculate the direct labor variances.