Direct Material Quantity Variance Managerial Accounting?

Question

I am completely lost on this problem. Would anyone mind helping me figure this out? Thanks!

Cox Company's direct material costs for the month of January were as follows:


Actual quantity purchased 18,000 kilograms
Actual unit purchase price $ 3.60 per kilogram
Materials price variance--
unfavorable (based on purchases) $ 3,600
Standard quantity allowed
for actual production 16,000 kilograms
Actual quantity used 15,000 kilograms

For January there was a favorable direct material quantity variance of what?

Answer 1

To find the quantity variance you first have to calculate the standard cost per kilogram of the material from the facts given. Its stated that there was an unfavorable price variance of $3,600 for the 18,000 kg purchased during the month. That means that Cox paid more for the material than its standard cost. Divide the $3,600 by the 18,000 units to get what the variance is per unit.

$3,600 / 18,000 units - $0.20/unit unfavorable price variance.

Since its an unfavorable variance, subtract that amount from the actual price to get the standard cost.

$3.60/kg - $0.20/kg = $3.40/kg standard cost.

Now that the standard cost per kg is known, just multiply it by the production quantitiy variance in units.

$3.40/kg x (16,000 - 15,000)kg = $3,400 favorable material variance.

Answer 2

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RE:
Direct Material Quantity Variance Managerial Accounting?
I am completely lost on this problem. Would anyone mind helping me figure this out? Thanks!

Cox Company's direct material costs for the month of January were as follows:


Actual quantity purchased 18,000 kilograms
Actual unit purchase price $ 3.60 per kilogram
Materials price...

Answer 3

Standard Quantity

Answer 4

Budgeted production 1,000 units
Actual production 980 units
Materials:
Standard price/pound $2.00
Standard pounds per completed unit 12
Actual pounds purchased and used in production 11,800
Actual price paid for materials $23,000