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Matthew Corporation manufactures paper shredding
equipment. Each paper shredder has a standard materials
cost of 20 pounds at $7.50 per pound or $150.00 in total.
40,000 pounds of materials were purchased for $320,000
during the period and 39,000 pounds were used in the
production of 2,000 good units. What is the direct materials
price variance? Use \"U\" or \"F\" to indicate whether the
variance is unfavorable or favorable. Do not show your
work or include any additional text with your answer. For
example, if your answer is $100,000 unfavorable, you
should enter $100,000 U.
41) Matthew Corporation manufactures paper shredding
equipment. Each paper shredder has a standard materials
cost of 20 pounds at $7.50 per pound or $150.00 in total.
40,000 pounds of materials were purchased for $320,000
during the period and 39,000 pounds were used in the
production of 2,000 good units. What is the direct materials
usage variance? Use \"U\" or \"F\" to indicate whether the
variance is unfavorable or favorable. Do not show your
work or include any additional text with your answer. For
example, if your answer is $100,000 unfavorable, you
should enter $100,000 U.
42)Matthew Corporation manufactures paper shredding
equipment and uses a process costing system. 2,000 units
were in process at the beginning of the period, 60%
complete. 20,000 units were started into production during
the period; 1,000 were in process at the end of the period,
60% complete. What are the equivalent units for
conversion costs?
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Solution
40)
Direct material price variance:
= AQ×SP-AQ×AP
= 39,000×$7.5-39,000×($320,000÷40,000)
= $19,500 U
41)
Direct material usage variance:
= SQ×SP- AQ×SP
= 2,000×20×$7.5-39,000×$7.5
= 7,500 F
42)MaterialsConversion costs%Units%UnitsCompleted
units210001002100010021000Closing
WIP1000100100060600Equivalent units2200021600Hence,
equivalent units for conversion cost are 21,600

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