1.
Actual production costs for the production of 1,000 stuffed bears required 1,750 pounds of
stuffing at a cost of $1.95 per pound and 1,950 labor hours at $15.25 per hour.
Required:
If required, round your answers to the nearest cent. Enter all amounts as positive numbers.
A. Calculate the direct material price variance.
$ SelectFavorableUnfavorableItem 2
B. Calculate the direct material usage variance.
$ SelectFavorableUnfavorableItem 4
Solution
A) Direct material price variance = AQ ( AP -SP)
= 1750 (1.95 - 2 )
= 1750 * - .05
= 87.50 (F )
B)Direct material usage variance = SR (AQ - SQ for actual production)
= 2 [1750 - ( 1000*1.5) ]
= 2 [ 1750 - 1500]
= 2 * 250
= 500 (Unfavorable )