Acoma, Inc., has determined a standard direct materials cost per unit of $8 (2 feet times...

Acoma, Inc., has determined a standard direct materials cost per unit of $8 (2 feet times $4 per foot). Last month, Acoma purchased and used 4, 200 feet of direct materials for which it paid $15, 750. The company produced and sold 2,000 units during the month.

Calculate the direct materials price, quantity, and spending variances.

Solutions

Expert Solution

Direct material price variance = Actual cost-(Standard rate*Actual Quantity)
	=15750-(4*4200)=	1050	Favorable

Direct material quantiy variance = Standard rate*(Standard quantity-Actual Quantity)
	=4*(4000-4200)=	800	Unfavorable

Direct material spending variance = 1050F + 800U = 250F

ekkarill92 answered 2 years ago

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