During March 2011, the Following Activity Was Recorded by the Company

question 119

Essay

During March 2011, the following activity was recorded by the company relating to the production of tybos:
1. The company produced 7,500 units during the month.
2. A total of 20,000 pounds of materials were purchased at a cost of $55,000.
3. A total of 20,000 pounds of materials were used in production.
4. 4,000 hours of labor were incurred during the month at a total wage cost of $44,000.
Instructions
Calculate the following variances for March for Malone, Inc.
(a) Materials price variance
(b) Materials quantity variance
(c) Labor price variance
(d) Labor quantity variance

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Definitions:

Controllable Costs

Expenses that a manager or organization has the power to influence or change, often within a specific time frame.

Generally Accepted Accounting Principles

A set of accounting standards and practices that are widely accepted and used in the U.S. for financial reporting and accounting.

Controllable Cost

Costs that can be influenced or managed by a decision-maker within a certain period.

Managerial Responsibility

The obligation of managers to make decisions, supervise subordinates, and implement activities that contribute to achieving the organization's objectives.