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Simba Company’s standard materials cost per unit of output is $10.00 (2.00 pounds x $5.00). During July, the company purchases and uses 3,200 pounds of materials costing $16,192 in making 1,500 units of finished product. Compute the total, price, and quantity materials variances. (Round per unit values to 2 decimal places, e.g. 52.75 and final answers to 0 decimal places, e.g. 52.)

Respuesta :

Answer:

A)1192 A

B) 192 A

C)  1000 A

Explanation:

The Question is to Compute Simba Company's Total, Price, and Quantity materials Variances

1) Computation of material Cost Variance

= The Standard Cost - The Actual Cost of the material

= 1,500 units x 2 pounds = 3000 pounds

Standard Cost = 3,000 pounds x $5 = $15,000

Therefore material variance = $15,000 - $16,192 = 1192A

2) The material Rate Variance or the Price Variance

= (Standard Rate - Actual Rate) Actual Quantity

= Actual Rae = $16,192 / 3200 = $5.06

Material Rate Variance = (5- 5.06) x 3,200

= 192 A

3) The material Usage Variance or Quantity variance

= (The Standard Quantity - Actual Quantity) Standard Rate

Standard Quantity = 1,500 Units x 2 Pounds = 3000 pounds

Material Usage Variance = (3,000-3,200) 5

= 1000 A

The quantitative assessment of the discrepancy between planned and actual behavior is known as variance analysis. This study is utilized to keep a corporation under control by looking into areas where performance has been surprisingly bad.

Note:

Standard cost = SC

Actual cost = AC

Standar rate = SR

Actual rate = AR

Standard Quantity = SQ

Actual Quantity = AQ

Material Cost Varience = MCV

Material Rate Varience = MRV

Material Usage Variance = MUV

1) Computation of Material Cost Variance (MCV)

[tex]\text{MCV = SC -AC}[/tex]

[tex]= 1,500[/tex] × [tex]2 = 3,000[/tex]

[tex]\text{SC = 3,000}[/tex] × [tex]5[/tex] [tex]= 15,000[/tex]

[tex]\text{AC ( Pounds of material costing)} = 16,192[/tex]

[tex]\text{MCV} = 15,000 - 16,192[/tex]

[tex]\text{MCV} = 1,192 (A)[/tex]

2) Computation of Material Rate Variance (MRV)

[tex]\text{MRV = (SR-AR) AQ}[/tex]

[tex]\text{AR} = 3,200[/tex]

[tex]\text{SR} = 5[/tex]

[tex]\text{AR} = \frac{16,192}{3200}[/tex]

[tex]\text{AR} = 5.06[/tex]

[tex]\text{MRV} = (5-5.06) 3,200\\\\text{MRV} = 192 (A)[/tex]

3) Computation of Material Usage Variance (MUV)

[tex]\text{MUV} = \text{ (SQ-AQ) SR)}\\\\\text{SQ} = 1,500 \text{ X } 2 = 3,000\\\\\text{MUV} = (3,000 -3,200) \text{ X } 5[/tex]

[tex]\text{MUV} = 1,000 (A)[/tex]

For more information regarding variance costing sums, refer to the link:

https://brainly.com/question/14976139

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