Respuesta :
Answer:
Direct Material Price Variance = $1,050 Favorable
Direct Material quantity Variance = $800 Unfavorable
Direct Material Spending Variance = $250 Favorable
Explanation:
Provided information we have,
Standard quantity = 2 feet per unit
Standard price per feet = $4 per feet
Actual units produced = 2,000
Actual cost = $15,750
Actual raw material used = 4,200 feet
Cost per feet actual = [tex]\frac{15,750}{4,200} = $3.75 per feet\\[/tex]
Standard quantity for actual output = 2,000 units [tex]\times[/tex] 2 feet
= 4,000 feet
Standard cost = 4,000 [tex]\times[/tex] $4 = $16,000
Direct Material Price Variance = (Standard Price - Actual Price) [tex]\times[/tex] Actual quantity
= ($4 - $3.75) [tex]\times[/tex] 4,200 = $1,050 Favorable
Since the value is positive as actual rate is less than standard rate, therefore, variance is favorable.
Direct Material Quantity Variance = (Standard Quantity - Actual Quantity) [tex]\times[/tex] Standard Price
= (4,000 - 4,200) [tex]\times[/tex] $4
= -$800 Unfavorable
As, the value is negative, since actual quantity used is higher than standard quantity, therefore, variance is unfavorable.
Direct Material Spending Variance = (Standard Cost - Actual Cost)
= $16,000 - $15,750
= $250 Favorable
As the value is positive because actual cost is less than standard cost the variance is favorable.
