Question

Jason Company uses a standard costing system and has set the
following standards for direct materials in order to produce
one unit of its only product:

                    standard quantity    standard price
direct materials         4 pounds        $16 per pound

During September, Jason Company purchased 39,000 pounds of
direct materials and produced 15,000 units. At September 30,
Jason had 13,000 pounds remaining in its direct materials
inventory.

Jason Company reported the following variances for September:

Direct material price variance ........  $42,000 unfavorable
Direct material quantity variance .....  $54,000 unfavorable

Calculate the number of pounds of direct materials in Jason's
September 1 direct materials inventory.

Answer 1

	Data Given:
	standard quantity	4	pound
	standard price direct materials	16	per pound
	Qty Purchased	39000	pounds
	Ending Inventory balance	13000	pounds
	Units Produced	15000	Units
	Material Price Variance	42000	UNFAVOURABLE
	Material Qty Variance	54000	UNFAVOURABLE
	Calculation of Beginning Qty of Direct material inventory
	Beginning Inventory =( Ending Inventory + Used in production ) - Purchase Inventor
	Ending Inventory	13000
	Add Used in production	63375	(See Note 1)
	Less: Inventory Purchased	-39000
Final Answer	Beginning Inventory as on Sep 1	37375
	Note 1:
	STANDARD Units Required	60000	(15000*4)
	Material Qty Variance = (Standard Units -Actual Units )* Standard RATE
	-54000 = (60000 - Actual Units ) * 16
	Actual Units Used in PRODUCTION	63375