1. AMIS 212 Introductory Managerial Accounting
Chapter 10 Module 5
CHAPTER 1 MODULE 1
AMIS 212 Introductory Managerial Accounting
Professor Marc Smith

2. Chapter 10 Module 5: Example #2
Use the DM price variance since we are asked to calculate the amount of direct materials purchased
DM Price Variance = (AQ x AP) - (AQ x SP)
(35,000 x AP) (35,000 x 4.00) = 7,000
35,000AP ,000 = 7,000
35,000AP = 147,000
AP = $4.20 per pound

3. Chapter 10 Module 5: Example #3
DL Rate Variance = (AH x AR) - (AH x SR)
300, (36,500 x 8.20)
300, ,300 = $1,460 unfavorable
● Remember, (AH x AR) represents the total
actual direct labor cost

4. Chapter 10 Module 5: Example #3
DL Efficiency Variance = (AH x SR) - (SH x SR)
(36,500 x 8.20) [(6,300 x 6) x 8.20)
299, ,960 = $10,660 favorable
The total direct labor variance would be:
1, ,660 = 9,200 favorable

5. Chapter 10 Module 5: Example #3
Use the DM quantity variance since we are asked to calculate the amount of direct materials used
DM Quantity Variance = (AQ x SP) - (SQ x SP)
(AQ x 5.00) [(6,300 x 8) x 5.00] = 9,000
5AQ ,000 = 9,000
5AQ = 261,000
AQ = 52,200 kilograms

6. Chapter 10 Module 5: Example #3
Use the DM price variance since we are asked to calculate the amount paid to purchase direct materials
DM Price Variance = (AQ x AP) - (AQ x SP)
(50,000 x AP) (50,000 x 5.00) = -2,500
50,000AP ,000 = -2,500
50,000AP = 247,500
AP = $4.95 per kilogram