FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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A company reports the following for one of its products.
Direct materials standard (3 pounds @ $2 per pound)
Actual direct materials used (AQ)
Actual units produced
Actual cost of direct materials used
AQ = Actual Quantity
SQ = Standard Quantity
AP = Actual Price
SP = Standard Price
Actual Cost
$6 per unit
X
260,000 pounds
70,000 units
Compute the direct materials price and quantity variances and identify each as favorable or unfavorable.
$ 455,000
Standard Cost
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Transcribed Image Text:A company reports the following for one of its products. Direct materials standard (3 pounds @ $2 per pound) Actual direct materials used (AQ) Actual units produced Actual cost of direct materials used AQ = Actual Quantity SQ = Standard Quantity AP = Actual Price SP = Standard Price Actual Cost $6 per unit X 260,000 pounds 70,000 units Compute the direct materials price and quantity variances and identify each as favorable or unfavorable. $ 455,000 Standard Cost
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