Fegox Firinghi (FF) produces flip flops. Each flip-flop requires 2 lbs of Flub and 1 lb of Fleeb, which are planned to cost $8 and $3 per lb. respectively. During the month of May, FF purchased 22,000 lbs of Flub for $194,000 and 13,000 lbs of Fleeb for $42,000. All materials were consumed in producing 10,500 good flip flops. Which is true?
A)Direct materials price variances total $21,000 unfav
B)Direct material price variances total $6,950 unfav
C)The standard price of Flub should be revised
D)The standard price of Flub should not be revised
E)a) and c) only

Question

Quizplus · Accepted Answer

First, calculate the actual pounds of Flub and Fleeb used:
Flub: 22,000 lbs purchased - 0 lbs ending inventory = 22,000 lbs used
Fleeb: 13,000 lbs purchased - 0 lbs ending inventory = 13,000 lbs used

Next, calculate the actual cost of materials used:
Flub: 22,000 lbs used x $8 per lb = $176,000
Fleeb: 13,000 lbs used x $3 per lb = $39,000
Total actual cost = $215,000

Then, calculate the standard cost of materials used:
Flub: 2 lbs per flip flop x 10,500 flip flops = 21,000 lbs x $8 per lb = $168,000
Fleeb: 1 lb per flip flop x 10,500 flip flops = 10,500 lbs x $3 per lb = $31,500
Total standard cost = $199,500

The direct material price variance is the difference between the actual cost and the standard cost:
$215,000 - $199,500 = $15,500 unfavorable

So, we know that option A is incorrect.

Option C suggests that the standard price of Flub should be revised, but there is no indication in the problem that the current standard price is incorrect. Therefore, option C is also incorrect.

The only remaining option is B, which states that the direct material price variances total $6,950 unfavorable. This is the correct answer based on the calculations above.

Therefore, the answer is:

Answer: B
 Direct material price variances total $6,950 unfav

Fegox Firinghi (FF) Produces Flip Flops