The Following Standards Have Been Established for a Raw Material

question 4

Essay

The following standards have been established for a raw material used to make product JN36: $\begin{array}{|l|r|l|}\hline \begin{array}{l}\text { Standard quantity of the material per } \\\text { unit of output }\end{array} & 6.3 & \text { pounds } \\\hline \text { Standard pric e of the material } & \$ 15.50 & \begin{array}{l}\text { per } \\\text { pound }\end{array} \\\hline\end{array}$
The following data pertain to a recent month's operations:


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:

Standard Labor Hours

A measurement in accounting for the amount of time workers are expected to spend on tasks, typically used to plan or assess productivity.

Direct Materials Price Variance

The difference between the actual cost of direct materials purchased and the expected (standard) cost multiplied by the actual quantity purchased.

Standard Costs

Standard costs are the estimated costs associated with the production of goods or services, used as target costs to aid in budgeting and performance evaluation.

Actual Costs

The real costs that a company incurs for producing or acquiring goods or services.