Standard Cost System Materials Variances

question 88

Essay

Standard cost system materials variances
Levron Corporation manufactures a line of cosmetics.The standard price of the ingredients in its beauty cream is $7 per ounce;the standard amount of material allowed per jar is 1.25 ounces.During December,5,300 jars were produced,requiring 6,784 ounces of ingredients at a total direct materials cost of $37,312.
(a)Calculate the materials price variance for December.Indicate whether it is favorable (F)or unfavorable (U).$________
(b)Who is responsible for this variance? ________
(c)Calculate the materials quantity variance for December.Indicate whether it is favorable (F)or unfavorable (U).$________
(d)What is Levron Corporation's total materials variance for December? Indicate whether it is favorable (F)or unfavorable (U).$________

Understand the concept of price controls including price ceilings and price floors.

Analyze the effects of price ceilings on market equilibrium, including shortages and changes in quality.

Evaluate the impact of government interventions in the market such as setting price ceilings below the equilibrium price.

Recognize the conditions under which price controls are binding or not binding.

---

Definitions:

Payroll Tax

A tax imposed on employers and employees, calculated as a percentage of the wages that employers pay their staff.

Federal Receipts

Revenue collected by the federal government, generally through taxes and fees.

Marginal Tax Rate

The Marginal Tax Rate is the tax rate applied to an individual's or corporation's last dollar of income, showing the fraction of additional income that is paid in tax.

Average Tax Rate

The average tax rate is the percentage of total income that an individual or corporation pays in taxes, calculated by dividing total tax paid by total income.