Video Producers manufactures two types of videos: regular and CD. The regular tapes require 5 units of direct material X at a standard price of $2 per unit. The CDs require 2 units of direct material Y at a standard price of $3.
During January the company purchased 9,000 units of X for $2.10 each and 3,600 units of Y at $3.20 each. January production used 8,800 units of X and 3,400 units of Y. Outputs of finished tapes was 1,750 of each type.
Required:
Compute the price and efficiency variances for each material.
For the rate variances use two different responsibility assumptions. First assume that rate variances are isolated at the time of purchase; second assume that the rate variances are isolated as materials are placed into production.
The efficiency variances for each material are determined during production.

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The Answer of Video Producers manufactures two types of videos: regular and CD. The regular tapes require 5 units of direct material X at a standard price of $2 per unit. The CDs require 2 units of direct material Y at a standard price of $3.
During January the company purchased 9,000 units of X for $2.10 each and 3,600 units of Y at $3.20 each. January production used 8,800 units of X and 3,400 units of Y. Outputs of finished tapes was 1,750 of each type.
Required:
Compute the price and efficiency variances for each material.
For the rate variances use two different responsibility assumptions. First assume that rate variances are isolated at the time of purchase; second assume that the rate variances are isolated as materials are placed into production.
The efficiency variances for each material are determined during production.

Video Producers Manufactures Two Types of Videos: Regular and CD