The Following Standards Have Been Established for a Raw Material

Essay

The following standards have been established for a raw material used in the production of product N70:
The following data pertain to a recent month's operations:
Required:
a.What is the materials price variance for the month?
b.What is the materials quantity variance for the month?
c.Prepare journal entries to record the purchase and use of the raw material during the month.(All raw materials are purchased on account. )
$\begin{array}{llcc} \text {Standard quantity of the material per unit of output....... } &8.0 \text {liters } \\ \text { Standard price of the material........................................ } &\$18.30 \text { per liter }\\\end{array}$
$\begin{array} { l r l } \text { Actual material purchased............... } & 6,600 & \text { liters } \\\text { Actual cost of material purchased ....... } & \$ 119,460 & \\\text { Actual material used in production ..... } & 6,000& \text { liters } \\\text { Actual output............................. } & 720 &\text { units of product N70 }\end{array}$