The Following Standards Have Been Established for a Raw Material

question 74

Essay

The following standards have been established for a raw material used to make product JN36:
$\begin{array}{ll} \text {Standard quantity of material per unit of output } & \text { 6.3pounds } \\ \text { Standard price of the material} & \text { \$15.50 per pound } \\\end{array}$

The following data pertain to a recent month's operations:
$$\begin{array} { l l } \text { Actual material purchased } & 6,700 \text { pounds } \\\text { Actual cost of material purchased } & \$ 100,500 \\\text { Actual material used in production } & 6,400 \text { pounds } \\\text { Actual output } & 920 \text { mits of product JN36 }\end{array}$$
Required:
a. What is the materials price variance for the month?
b. What is the materials quantity variance for the month?

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Definitions:

Constraints

Limitations or restrictions that affect decision-making or the execution of plans.

Lower-level Managers

Managers at the lower ranks of an organizational hierarchy, directly supervising non-managerial employees and handling day-to-day operations.

Authority

denotes the power or right to give orders, make decisions, and enforce obedience, typically within organizational or societal structures.

Constraints

Limitations or restrictions that affect the feasibility or development of something.