Question

The following data relate to direct materials costs for February:

Materials cost per yard: standard, $2.00; actual, $2.10
Standard yards per unit: standard, 4.5 yards; actual, 4.75 yards
Units of production: 9,500

Calculate the direct materials price variance.

a.$378.00 unfavorable

b.$1,795.50 favorable

c.$378.00 favorable

d.$4,512.50 unfavorable

Use this information for St. Augustine Corporation to answer the question that follow.

St. Augustine Corporation originally budgeted for $360,000 of fixed overhead at 100% of normal production capacity. Production was budgeted to be 12,000 units. The standard hours for production were 5 hours per unit. The variable overhead rate was $3 per hour. Actual fixed overhead was $360,000 and actual variable overhead was $170,000. Actual production was 11,700 units.

The fixed factory overhead volume variance is

a.$5,500 favorable

b.$9,000 unfavorable

c.$5,500 unfavorable

d.$9,000 favorable

Answer 1

	Material Price Variance:
	(Standard Price-Actual Price)* Actual Quantity Used
	(2-2.10)*(9500*4.75)
	-4,512.50	Unfavourable
	Answer is D
	Actual Units	11,700.0			Fixed OH Budgeted	360,000.00
	Predetermined OH Rate	30.0			Units	12,000.00
	OH Applied to Actual Work	351,000.0			Predetermined OH Rate	30.00
	Fixed Overhead Volume Variance:
	(Budgeted Overhead-Applied Overhead)
	(360000-351000)
	9,000.0	Unfavourable
	Answer is B