In Producing 700 Units of Product CBA Last Period, Cobalt

question 92

Essay

In producing 700 units of Product CBA last period, Cobalt Company used 5,000 pounds of Material H, costing $34,250. The company has established the standard of using 7.2 pounds of Material H per unit of CBA, at a price of $7.50 per pound.
(a) Calculate the materials price and quantity variances associated with producing the 700 units, and indicate whether they are favorable or unfavorable:
(b) Record the entry for the material used and related variances for Cobalt.
(c) Assume these variances are immaterial, prepare the entry to close them out at the end of the year.

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Definitions:

Profits and Losses

The net earnings or losses of a company over a specified period, determined by subtracting total expenses from total revenues.

Remaining Partners

Partners who continue the partnership business after one or more partners have exited through withdrawal, ejection, or death.

Original Partnership Agreement

A legal document that outlines the terms, conditions, and operations of a partnership.

Book Value

The net value of a company's assets minus its liabilities, reflecting the total value if assets were sold and liabilities paid off.