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Alexishp33
07.06.2020 •
Business
Direct Materials Variances Silicone Engine Inc. produces wrist-worn tablet computers. The company uses Thin Film Crystal (TFC) LCD displays for its products. Each tablet uses one display. The company produced 580 tablets during December. However, due to LCD defects, the company actually used 600 LCD displays during December. Each display has a standard cost of $15.00. Six hundred LCD displays were purchased for December production at a cost of $8,550. Determine the price variance, quantity variance, and total direct materials cost variance for December. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Price variance $ Quantity variance $ Total direct materials cost variance $
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Ответ:
The price variance is -$450 favorable
The quantity variance is $300 unfavorable
The Total direct materials cost variance is -$150 favorable
Explanation:
According to given data we have the following:
standard price=$15
Actual price=$8,550/600=$14.25
standard quantity=580
Actual quantity=600
To calculate the price variance, quantity variance, and total direct materials cost variance for December we would have to make the following calculations:
price variance=(Actual price-standard price)*Actual quantity
price variance=($14.25-$15)*600
price variance=-$450 favourable
quantity variance=(Actual quantity-standard quantity)*standard price
quantity variance=(600-580)*$15
quantity variance=$300 unfavorable
total direct materials cost variance=materials price variance+material quantity variance
total direct materials cost variance=-$450+$300
total direct materials cost variance=-$150
Ответ: