Question

The Matisse Co. produces banana cakes. The following information relates to the actual production of 4,000 banana cakes.
Standards:
·         Direct materials cost $2.00 per pound & each cake requires 1 pound of bananas.
·         Direct labor cost $11.00 per hour & each cake will take 1 DLH to complete.
Actual:
·         Bananas $1.90 per pound. 4,500 pounds of bananas were purchased and used.
·         Actual direct labor cost was $43,460 at a cost of $10.60 per DLH.

What is the direct materials quantity variance?

What is the direct materials price variance?

What is the direct materials spending variance is:

Answer 1

Direct material variances
Particulars	Amount
Standard price per unit of raw material	$                  2.00
Less: actual price per unit of raw material	$                  1.90
Price variance per unit of raw material	$                  0.10
× units of raw materials purchased	4,500
Direct material price variance	$                    450
Particulars	Per one unit of output	× actual output	Total
Standard raw materials units required per unit of output	1.00	4,000.00	4,000.00
Less: actual raw materials units used	1.13	4,000.00	4,500.00
Difference in raw materia units used			(500.00)
× standard price per unit of raw material			$                  2.00
Direct material quantity variance	-		$        (1,000.00)
Summary
Particulars	Amount	Nature
Materials quanity variance	$         (1,000.00)	Unfavorable
Materials price variance	$              450.00	Favorable
Total material spending variance	$            (550.00)	Unfavorable

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