FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Ed Co. manufactures two types of O rings, large and small. Both rings use the same material but require different amounts. Standard materials for both are shown.
Large Small
rubber 3 feet at $0.25 per foot 1.25 feet at $0.25 per foot
connector 1 at $0.03 1 at $0.03
At the beginning of the month, Ed Co. bought 25,000 feet of rubber for $6,875. The company made 3,000 large O rings and 4,000 small O rings. The company used 14,500 feet of rubber.
Required:
What are the direct materials price variance, the direct materials quantity variance, and the total direct materials cost variance?
If they bought 10,000 connectors costing $310, what would the direct materials price variance be for the connectors?
If there was an unfavorable direct materials price variance of $125, how much did they pay per foot for the rubber?
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