Problem 10-13 (45 minutes)
1. a.
Actual Quantity of Input,
at Actual Price
(AQ × AP)
Actual Quantity of
Input,
at Standard Price
(AQ × SP)
Standard Quantity
Allowed
for Actual Output,
at Standard Price
(SQ × SP)
21,600 feet** ×
$3.30 per foot
= $71,280
21,600 feet** ×
$3.00 per foot
= $64,800
21,600 feet* ×
$3.00 per foot
= $64,800
Materials price variance =
$6,480 U
Materials quantity
variance = $0
Spending variance = $6,480 U
*
12,000 units × 1.80 feet per unit = 21,600 feet
**
12,000 units × 1.80 feet per unit = 21,600 feet
Alternatively, the variances can be computed using the formulas:
Materials price variance = AQ (AP – SP)
= 21,600 feet ($3.30 per foot – $3.00 per foot)
= $6,480 U
Materials quantity variance = SP (AQ – SQ)
= $3.00 per foot (21,600 feet – 21,600 feet)
= $0
