Print Works company has collected actual results for the current month as follows: Actual amounts: 5,900 Units produced Direct materials purchased and used (7,900 lbs.) $31,600 Budgeted production and standard costs were: Budgeted production Direct materials 5,000 units 2.5 lbs/unit at $2/b. Which of the following is the direct materials quantity variance? OA $13,700 unfavorable B. $13,700 favorable C. $15,800 unfavorable D. $15,800 favorable
Print Works company has collected actual results for the current month as follows: Actual amounts: 5,900 Units produced Direct materials purchased and used (7,900 lbs.) $31,600 Budgeted production and standard costs were: Budgeted production Direct materials 5,000 units 2.5 lbs/unit at $2/b. Which of the following is the direct materials quantity variance? OA $13,700 unfavorable B. $13,700 favorable C. $15,800 unfavorable D. $15,800 favorable
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter9: Evaluating Variances From Standard Costs
Section: Chapter Questions
Problem 3CMA
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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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