Sunland Company's standard materials cost per unit of output is $10.50 (2.50 pounds x $4.20). During July, the company purchases and uses 2,700 pounds of materials costing $14,580 in making 1,200 units of finished product. Compute the total, price, and quantity materials variances. (Round per unit values to 2 decimal places, eg. 52.75 and final answers to 0 decimal places, e.g. 52.) Total materials variance Materials price variance $ $ Materials quantity variance $
Sunland Company's standard materials cost per unit of output is $10.50 (2.50 pounds x $4.20). During July, the company purchases and uses 2,700 pounds of materials costing $14,580 in making 1,200 units of finished product. Compute the total, price, and quantity materials variances. (Round per unit values to 2 decimal places, eg. 52.75 and final answers to 0 decimal places, e.g. 52.) Total materials variance Materials price variance $ $ Materials quantity variance $
Chapter1: Financial Statements And Business Decisions
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:Sunland Company's standard materials cost per unit of output is $10.50 (2.50 pounds x $4.20). During July, the company purchases
and uses 2,700 pounds of materials costing $14,580 in making 1,200 units of finished product.
Compute the total, price, and quantity materials variances. (Round per unit values to 2 decimal places, e.g. 52.75 and final answers to 0
decimal places, e.g. 52.)
Total materials variance
Materials price variance
Materials quantity variance
$
$
$
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