Meleagris Gallopavo Case
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1. The direct materials variance is equal to the actual cost less the standard cost. Actual cost is calculated as actual quantity multiplied by actual price, and standard cost is calculated as standard quantity multiplied by standard price. In this case, standard cost = (3900 * 10) * .5 = $19,500. Actual cost = (3900 * 10) * .45 = $17,550. This yields a direct materials variance of $17,550 - 19,500 = $1,950(F).In addition, the direct materials variance is equal to the direct materials price variance plus the direct materials quantity variance, which provides a check to this calculation. For the purposes of this calculation, the actual quantity is 39,000 (10lbs * 3900 whole turkeys). The direct materials price variance is the difference between the actual price and the standard price multiplied by the actual quantity purchased: PriceVariance = (ActualPrice - StandardPrice) * ActualQuantity
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Approximate Word count = 627
Approximate Pages = 3 (250 words per page)
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