Young Inc. produces plastic bottles. Production of 16-ounce bottles has a standard unit quantity of 0.45 ounce of plastic per bottle. During the month of June, 240,000 bottles were produced using 110,000 ounces of plastic. The actual cost of plastic was $0.042 per ounce, and the standard price was $0.045 per ounce. There is no beginning or ending inventories of plastic.

Required:

Calculate the materials price and usage variances using the columnar and formula approaches. Enter amounts as positive numbers and select Favorable or Unfavorable.

a. Materials Price Variance $
b. Material Usage Variance $

a. Materials Price Variance - $330 favorable.

b. Material Usage Variance - $90 unfavorable.

Materials Price Variance = (Actual Quantity × Actual Price ) - (Actual Quantity × Standard Price )

= (110,000 × $ 0.042) - (110,000 × $ 0.045)

= $330  Favorable

And,

Material Usage Variance = Standard Price × ( Standard Quantity - Actual Quantity)

= $ 0.045 × ( 108,000 - 110,000)

= $ 90 Unfavorable

Working Note :

Standard Quantity = Number of Bottles ×  0.45 ounce of plastic per bottle

= 240,000 ×  0.45

= 108,000 Ounces of Plastic

Therefore, we can conclude that

a. Materials Price Variance - $330 favorable.

b. Material Usage Variance - $90 unfavorable.

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Materials Price Variance $= 4620- 4950= 330 Favorable

Material Usage Variance $  = 4950-4860= 90 Unfavorable

Explanation:

a. Materials Price Variance $= Actual Price * Actual Quantity- Standard Price* Actual Quantity

Materials Price Variance $=$0.042* 110,000-$0.045*110,000

Materials Price Variance $= 4620- 4950= 330 Favorable

b. Material Usage Variance $= Standard Price *  Actual  Quantity- Standard Price* Standard Quantity

Material Usage Variance $  =0.045*110,000-$0.045*108000

Material Usage Variance $  = 4950-4860= 90 Unfavorable

  Actual Quantity       Actual Price      Standard Quantity  Standard Price

         1                             2                        3                              4

     110,000 ounces      $ 0.042              240,000*0.45          $ 0.045

                                                               = 10,8000

Materials Price Variance $= (1*2) - (1*4)= 110,000*$0.042 -110,000*$0.045

Materials Price Variance $=4620- 4950= 330 Favorable

Material Usage Variance $= (4*1)- (4*3)= 0.045*110,000-$0.045*108000

Material Usage Variance =4950-4860= 90 Unfavorable

hi,

henry is an economist and wants to understand the relationship between inflation and consumer spending habits. for his research, he needs the consumer price index for 2014 and the inflation rate. based on the prices of goods given, what will he find to be the cpi and inflation rate for 2014? assume that a consumer’s basket for three consecutive years consists of the following:

you dont privide answer choices.

answer - 15% of a inflatation rate is 15% less in cpi

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