The Following Standards Have Been Established for a Raw Material

question 363

Essay

The following standards have been established for a raw material used to make product I92: The following data pertain to a recent month's operations: The direct materials purchases variance is computed when the materials are purchased.
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:

Cost of Goods Manufactured

The total production cost of goods completed during a specific period, including materials, labor, and overhead costs.

Adjusted Cost of Goods Sold

This refers to the cost of goods sold figure after adjustments for any changes in inventory or other factors affecting the cost of goods produced and sold.

Cost of Goods Manufactured

The total cost incurred by a company to produce goods in a specific period, including labor, material, and overhead.

Adjusted Cost of Goods Sold

The cost of goods sold figure after it has been adjusted for returns, allowances, and any other adjustments.