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  • Material Variance Exercise

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    The document provides information about a materials variance exercise for a company. It states that the company uses 4 units of material per product, purchased 1,200 units of material for $3,600, and used 900 units. With a standard cost of $11.20 per product, the quantity variance is +$280. The number of units produced is 200. The price variance is +$240. The journal entries to record these events debit various inventory and expense accounts and credit accounts payable and inventory.

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    cost accounting

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    The document provides information about a materials variance exercise for a company. It states that the company uses 4 units of material per product, purchased 1,200 units of material for $3,600, and used 900 units. With a standard cost of $11.20 per product, the quantity variance is +$280. The number of units produced is 200. The price variance is +$240. The journal entries to record these events debit various inventory and expense accounts and credit accounts payable and inventory.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as XLS, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    9 views1 page

    Material Variance Exercise

    Uploaded by

    ssregens82
    The document provides information about a materials variance exercise for a company. It states that the company uses 4 units of material per product, purchased 1,200 units of material for $3,600, and used 900 units. With a standard cost of $11.20 per product, the quantity variance is +$280. The number of units produced is 200. The price variance is +$240. The journal entries to record these events debit various inventory and expense accounts and credit accounts payable and inventory.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as XLS, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 1

    AMIS 525

    Materials Variances Exercise

    A company expects to use 4 units of material for each unit of its product. During the first period of operations, 1,200 units of material are purchased for $3,600, and 900 units of material are used. The standard cost of materials for a unit of product is $11.20. The quantity variance is +$280U.

    1. what is the number of units produced? 2. what is the price variance? 3. what are the journal entries used to record these events?

    Solution: 11.20 / 4 = 2.8 [900 - SA] * 2.8 = +280 SA = 800 Q = SA / SIOR = 800 / 4 = 200 PV = buy RMI PV AP use WIP QV RMI
    1/9/2014

    1,200 * [ 3 - 2.8 ] = +240U 3360 240 3600 2240 280 2520

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