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Question
Gates Company reports the following information regarding the production on one of its products for the month. Compute the direct materials cost variance, the direct materials price variance, the direct materials quantity variance and identify each as either favorable or unfavorable.
| Direct materials standard (6 lbs. @ $3/lb.) | $18 per finished unit |
| Actual direct materials used | 179,000 lbs. |
| Actual finished units produced | 30,000 units |
| Actual cost of direct materials used | $554,900 |
Answer
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Related questions
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Use the following information to prepare a budgeted income statement for Arbor Company for the month of June.
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b. Cash receipts from sales: 40% is collected in the month of sale, 50% in the next month, and 10% in the second month after sale (uncollectible accounts are negligible and can be ignored). Sales amounts are: April (actual), $1,450,000, May (actual), $1,600,000, and June (budgeted), $1,700,000.
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Cabot Company collected the following data regarding production of one of its products. Compute the direct materials cost variance. Direct materials standard (6 lbs. @ $2/lb.)
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