What are the possible causes for the material price

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Reference no: EM133392324

Case: Playwood Company produces wooden toys and has the following standards for one of its toys:

Direct materials (3 strips of wood @ $5 per strip) $15

Direct labour (1.5 hours @ $8 per hour) $12

During the year, the company produced 1,250 units of this toy. Actual wood purchased and used was 3,800 strips at a total cost of $17,480. Actual direct labour hour was 1,900 hours at $7.50 per hour.

Question 1: Determine the material price variance and whether it is favourable or unfavourable.

Question 2: Determine the material usage variance and whether it is favourable or unfavourable.

Question 3: Determine the total materials variance and whether it is favourable or unfavourable.

Question 4: What are the possible causes for the material price and usage variance?

Reference no: EM133392324

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