Question: Geneva Gizmos AG has set the following direct material standards for its product, the photon gismo.
Standard costs for one unit of output:
Material I, 10 units of input at 6€ per unit
Material II, 20 units of input at 2€ per unit
During august, the company had the following requirements:
Universal gismos produced 2000 Materials purchased and used:
Material I: 22.000 units at 6,25€
Material II: 38.000 units at 1,80€
Question is: Compute the direct material price and quantity variances.
Answers are: Price variances 2100€ favorable Quantity variances 8000€ unfavorable
I have no idea how they got that answer, can someone help me? Thanks !!
Vraag berekening
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- Vast lid
- Berichten: 53
- Lid geworden op: 02 apr 2012, 12:25
Re: Vraag berekening
22000*(6-6,25)+38000*(2-1,8)=-5500+7600=2100
6*(20000-22000)+2*(40000-38000)=-12000+4000=-8000
Dirk
6*(20000-22000)+2*(40000-38000)=-12000+4000=-8000
Dirk