Direct Materials Variances (15 points) Carter Company has projected sales and production in units for...
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Accounting
- Direct Materials Variances (15 points) Carter Company has projected sales and production in units for the second quarter of next year as follows: The following materials standards have been established for a particular product:
| Standard quantity per unit of output | 5.2 meters |
| Standard Price | 15.60 per meter |
The following data pertain to the actual operations concerning the product for the last month:
| Actual materials purchased | 8,500 meters |
| Actual cost of materials purchased | $139,400 |
| Actual materials used in production | 8,500 meters |
| Actual units produced | 1,640 units |
REQUIRED:
- Determine the Direct material price and efficiency variances. Include whether each of the variances are favorable or unfavorable.
- Provide three potential reasons for the direct material price variance
- Provide three potential reasons for the direct material efficiency variance.
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