Regent Corp

question 95

Essay

Regent Corp.uses a standard cost system to account for the costs of its one product.Materials standards are 3 pounds of material at $14 per pound,and labor standards are 4 hours of labor at a standard wage rate of $11.During July Regent Corp.produced 3,300 units.Materials purchased and used totaled 10,100 pounds at a total cost of $142,650.Payroll totaled $146,780 for 13,150 hours worked.Calculate the:
a.direct materials price variance.
b.direct materials quantity variance.

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Definitions:

Activity Level

Refers to the volume of production or services activities at any given point or period, often influencing costs and revenues.

Planning Budget

A budget created for a specific level of activity; it helps managers plan the expected revenues, costs, and profits for different levels of operational activity.

Total Variable Cost

The cumulative cost that varies in direct proportion to changes in the level of output or activity, such as raw materials and direct labor.

Total Expenses

The aggregate amount of all costs incurred by a business during a specific period.