Token Company has the following information concerning its direct materials: Direct Materials: Standard Quantity 100,000 Actual Quantity 80,000 Standard Price $3 $4 Actual Price A. Determine the materials price variance and whether it is favorable or unfavorable. B. Determine the materials usage variance and whether it is favorable or unfavorable.

Token Company has the following information concerning its direct materials: Direct Materials: Standard Quantity 100,000 Actual Quantity 80,000 Standard Price $3 $4 Actual Price A. Determine the materials price variance and whether it is favorable or unfavorable. B. Determine the materials usage variance and whether it is favorable or unfavorable.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter8: Standard Costs And Variances

Section: Chapter Questions

Problem 12EA: Acme Inc. has the following information available: A. Compute the material price and quantity, and...

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Perfect Pet Collar Company makes custom leather pet collars. The company expects each collar to require 2.35 feet of leather and predicts leather will cost $4.20 per foot. Suppose Perfect Ret made 85 collars during February. For these 85 collars, the company actually averaged 2.50 feet of leather per collar and paid $3.80 per foot. Required: 1. Calculate the standard direct materials cost per unit. 2. Without performing any calculations, determine whether the direct materials price variance will be favorable or unfavorable. 3. Without performing any calculations, determine whether the direct materials quantity variance will be favorable or unfavorable. 6. Calculate the direct materials price and quantity variances. Complete this question by entering your answers in the tabs below. Req 1 Req 2 and 3 Req 6 Calculate the standard direct materials cost per unit. Note: Round your answer to 2 decimal places. Standard Direct Materials per Collar Reg 2 and 3>
Deluxe, Inc. produced 1,000 units of the company's product in 2018. The standard quantity of direct materials was three yards of cloth per unit at a standard cost of $1.05 per yard. The accounting records showed that 2,600 yards of cloth were used and the company paid $1.10 per yard. Standard time was two direct labor hours per unit at a standard rate of $10.75 per direct labor hour. Employees worked 1,400 hours and were paid $10.25 per hour. Read the requirements. Requirement 1. What are the benefits of setting cost standards? Standard costing helps managers do the following: Requirement 2. Calculate the direct materials cost variance and the direct materials efficiency variance as well as the direct labor cost and efficiency variances. Begin with the cost variances. Select the required formulas, compute the cost variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U). (Abbreviations used: AC actual cost; AQ = actual…
H1. Answer b please
Which of the following is the correct formula for the direct materials quantity variance? O a. (Actual Quantity - Actual Price) - (Standard Quantity Standard Price) O b. (Actual Quantity- Standard Quantity) * Actual Price O c. (Actual Price - Standard Price) × Actual Quantity O d. (Actual Quantity - Standard Quantity) x Standard Price
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"Required 2" looks the save as "Required 1" (pictured).
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1. The price variance for materials is the difference between the actual quantity of materials at the standard price and the standard quantity of materials at the standard price. A. True B. False 2. Standards are determined after the accounting period has ended, so comparisons can be made between standard costs (budgeted costs) and actual total costs and actual unit costs. A. True B. False
Subject: Cost Accounting
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