FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Total Materials Variance
Krumple Inc. produces aluminum cans. Production of 12-ounce cans has a standard unit quantity of 4.7 ounces of aluminum per can. During the month of April, 450,000
cans were produced using 1,875,000 ounces of aluminum. The actual cost of aluminum was $0.10 per ounce and the standard price was $0.08 per ounce. There are no
beginning or ending inventories of aluminum.
Required:
Calculate the total variance for aluminum for the month of April. Enter amount as a positive number and select Favorable or Unfavorable.
$
Unfavorable
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V Check My Work
1. Compute the actual costs = actual quantity x actual cost per unit; (AQ × AP)
2. Compute the standard cost = standard quantity (units produced x standard unit quantity) x standard cost per unit; (SQ × SP)
3. Subtract standard costs from the actual costs then determine if the result is favorable or unfavorable
Review the "How to Calculate the Total Variance for Materials" example in your text.
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Transcribed Image Text:Total Materials Variance Krumple Inc. produces aluminum cans. Production of 12-ounce cans has a standard unit quantity of 4.7 ounces of aluminum per can. During the month of April, 450,000 cans were produced using 1,875,000 ounces of aluminum. The actual cost of aluminum was $0.10 per ounce and the standard price was $0.08 per ounce. There are no beginning or ending inventories of aluminum. Required: Calculate the total variance for aluminum for the month of April. Enter amount as a positive number and select Favorable or Unfavorable. $ Unfavorable Feedback V Check My Work 1. Compute the actual costs = actual quantity x actual cost per unit; (AQ × AP) 2. Compute the standard cost = standard quantity (units produced x standard unit quantity) x standard cost per unit; (SQ × SP) 3. Subtract standard costs from the actual costs then determine if the result is favorable or unfavorable Review the "How to Calculate the Total Variance for Materials" example in your text.
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