Direct materials information Medium speed bump Large speed bump

Standard pounds per unit 15 ?

Standard price per pound $1.00 $1.80

Actual quantity purchased and used per unit ? 16

Actual price paid for material per pound $1.80 $2.10

Direct materials price variance $1,120 U $1,920 U

Direct materials quantity variance $100 F ?

Total direct material variance ? $480 U

Number of units produced 100 400

Calculate missing direct material variables

Explanation:

For Medium speed bump

AQAP AQSP SQSP

1,400$ 1.80 1,400$ 1.00 1,500$ 1.00

$ 2,520.00 $ 1,400.00 $ 1,500.00

A B C

DMPVA-B$ 1,120.00U

DMQVC-B$ 100.00F

DMVA-C$ 1,020.00U

We know that Direct material price variance = AQ(AP-SP) = 1120

AQ = 1120/(AP-SP)

AQ = 1120/(1.80-1.00)

AQ = 1,400

SQ = 100 x 15 = 1500

For Large speed bump

AQAP AQSP SQSP

6,400$ 2.10 6,400$ 1.80 7,200$ 1.80

$ 13,440.00 $ 11,520.00 $ 12,960.00

A B C

DMPVA-B$ 1,920.00U

DMQVC-B$ 1,440.00F

DMVA-C$ 480.00U

Using this equation , DMV = DMPV + DMQV

DMQV = DMV-DMPV

DMQV = 480-1920

DMQV = 1440 F

Direct material quantity variance = SP(SQ-AQ) = 1440

SQ-AQ = 1440/SP

1440/SP + AQ = SQ

1440/1.8 + 6400 = SQ

SQ = 7200

answer; i believe the correct answer is (a) purchase of treasury stock;

3,500 beverages

explanation: