E23-5 Compute materials price and quantity variance

The standard cost of Product B manufactured by MIT Company includes three units of direct materials at

$5.00 per unit. During June, 29,000 units of direct materials are purchased at a cost of $4.70 per unit, and

29,000 units of direct materials are used to produce 9,500 units of Product B.

Instructions

(a) Compute the total materials variance and the price and quantity variances.

(b) Repeat (a), assuming the purchase price is $5.15 and the quantity purchased and used is 28,000 units

NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" .

(a)

Total Materials Variance:

(

AQ

X

AP

)

minus

(

SQ

X

SP

)

(

Value

X

Value

)

minus

(

Value

X

Value

)

=

?

minus

?

=

Value

Materials price variance:

(

AQ

X

AP

)

minus

(

AQ

X

SP

)

(

Value

X

Value

)

minus

(

Value

X

Value

)

=

?

minus

?

=

Value

Materials quantity variance:

(

AQ

X

SP

)

minus

(

SQ

X

SP

)

(

Value

X

Value

)

minus

(

Value

X

Value

)

=

?

minus

?

=

Value

(b)

Total Materials Variance:

(

AQ

X

AP

)

minus

(

SQ

X

SP

)

(

Value

X

Value

)

minus

(

Value

X

Value

)

=

?

minus

?

=

Value

Materials price variance:

(

AQ

X

AP

)

minus

(

AQ

X

SP

)

(

Value

X

Value

)

minus

(

Value

X

Value

)

=

?

minus

?

=

Value

Materials quantity variance:

(

AQ

X

SP

)

minus

(

SQ

X

SP

)

(

Value

X

Value

)

minus

(

Value

X

Value

)

=

?

minus

?

=

Value