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jugganuts jugganuts
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2 months ago
Nantucket, Inc. uses a standard cost system in which direct materials are carried at standard cost. Standards for one unit of product are: standard quantity of 2 feet, standard price $1.50 per foot. During May, Nantucket purchased 16,000 feet of direct material at a cost of $30,000 and used 15,500 feet in production of 7,500 units.

Required:

Calculate the direct materials price and quantity variances and indicate whether the variances are favorable or unfavorable.
Textbook 
Managerial Accounting

Managerial Accounting


Edition: 4th
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karatinskaratins
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More solutions for this book are available here
Direct material price variance = $30,000 - ($1.50 × 16,000) = $6,000 unfavorable
Direct material quantity variance = 15,500 - (2 × 7,500) = 500; 500 × $1.50 = $750 unfavorable
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jugganuts Author
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Thanks for your help!!
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