A company isolates its raw material price variance in order to provide the earliest possible information to the manager responsible for the variance.
| A company isolates its raw material price variance in order to provide the earliest possible information to the manager responsible for the variance. The budgeted amount of material usage for the year was computed as follows: | ||||||
| 37,000 units of finished goods × 2.5 lbs./unit × $6.25/lb. = $578,125 | ||||||
| Actual results for the year were the following: | ||||||
| Finished goods produced | 36,500 units | |||||
| Raw materials purchased | 91,500 pounds | |||||
| Raw materials used | 90,885 pounds | |||||
| Cost per pound | $6.19 | |||||
| The raw material price variance for the year was: | Answer: | |||||
| The raw materials quantity purchased variance was: | Answer: | |||||
| The total raw materials variance (for purchased) is: | Answer: | |||||
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