VivianNovak
Nov 14, 2009, 12:15 PM
HERE IS THE PROBLEM AND THE ANSWER. I AM HAVING TROUBLE DETERMINE WHAT FORMULA WAS USED, IF ANY, AND UNDERSTANDING THE CONCEPT.
Here is the problem
Material Variances---Working Backwards
Joseph Company's direct materials costs are as follows:
Standard price per pound of direct materials $ 10.00
Direct materials purchased (pounds) 2,000
Total standard direct materials (pounds) for product manufactured 1,600
Direct materials used in production (pounds) 1,800
Direct materials purchase price variance - favorable 400
Required compute the following:
1. The actual purchase price per pound of direct material (rounded to the nearest penny)
2. The direct materials usage variance
?ANSWER
WHAT IS THE CORRECT FORMULA --- I CAN'T FIGURE IT OUT??
2,000 lbs ($10 - ?) = 400 favorable
400 DIVIDED BY 2,000 = .20 LB
$ 10 (1600 LBS - 1800 LBS) = 2,000 UNFAVORABLE
Here is the problem
Material Variances---Working Backwards
Joseph Company's direct materials costs are as follows:
Standard price per pound of direct materials $ 10.00
Direct materials purchased (pounds) 2,000
Total standard direct materials (pounds) for product manufactured 1,600
Direct materials used in production (pounds) 1,800
Direct materials purchase price variance - favorable 400
Required compute the following:
1. The actual purchase price per pound of direct material (rounded to the nearest penny)
2. The direct materials usage variance
?ANSWER
WHAT IS THE CORRECT FORMULA --- I CAN'T FIGURE IT OUT??
2,000 lbs ($10 - ?) = 400 favorable
400 DIVIDED BY 2,000 = .20 LB
$ 10 (1600 LBS - 1800 LBS) = 2,000 UNFAVORABLE