The Mason and Dixon Candle Company has assembled the data below regarding two of the raw materials it uses in its candle-making process.
Required:
Compute the price and usage variances for each of the raw materials. Indicate whether each variance is favorable or unfavorable.

Question

The Mason and Dixon Candle Company has assembled the data below regarding two of the raw materials it uses in its candle-making process. 
  Required:
Compute the price and usage variances for each of the raw materials. Indicate whether each variance is favorable or unfavorable.

Quizplus · Accepted Answer

The Answer is
Paraffin Wax:
Material price variance = ($0.09 x 21,000) - ($0.10 x 21,000) = $210 F
Material usage variance = ($0.10 x 21,000) - ($0.10 x 20,000) = $100 U
Scent:
Material price variance = ($52 x 110) - ($50x 110) = $220 U
Material usage variance = ($50 x 110) - ($50 x 100) = $500 U

The Mason and Dixon Candle Company Has Assembled the Data