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    567Confu's Avatar
    567Confu Posts: 1, Reputation: 1
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    #1

    Oct 1, 2006, 03:09 PM
    Calculating Material Variances
    The standard price for the Z240 electrical relay (a component used in the production of a commercial refrigeration unit) is $25. Standards call for 2 relays per unit of finished product. In July, the company purchases 100 relays for $2,600. The company used 83 relays in the production of 40 refrigeration units (three relays were damaged in the installation process).

    Calculate the material price variance and the material quantity variance related to the Z240 electrical relay. Indicate whether the variances are favorable or unfavorable.
    CaptainForest's Avatar
    CaptainForest Posts: 3,645, Reputation: 393
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    #2

    Oct 1, 2006, 06:50 PM
    Material Price Variance = Qa (Ps-Pa)
    Where Qa is actual quantity used, Ps is standard/budget price and Pa is actual price

    Material Efficiency Variance = Ps (Qs-Qa)
    Where Ps is standard/budget price, Qs is budget quantity, and Qa is actual quantity used

    You tell us what you think the answer is, and why and we will look it over for you.

    Hint: Use the formulas.
    Barry meister's Avatar
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    #3

    Apr 2, 2008, 05:39 AM
    Can you list all the variances
    staceanng's Avatar
    staceanng Posts: 4, Reputation: 1
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    #4

    Jun 27, 2010, 07:16 AM

    Price variance = $83
    staceanng's Avatar
    staceanng Posts: 4, Reputation: 1
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    #5

    Jun 27, 2010, 07:31 AM

    Price variance = $83
    staceanng's Avatar
    staceanng Posts: 4, Reputation: 1
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    #6

    Jun 27, 2010, 07:32 AM

    Price variance = $83
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