Frogue Corporation uses a standard cost system. The following information was provided for the period that just ended: Actual price per kilogram $2.50
Actual kilograms of material used 31,000
Actual hourly labor rate $18.10
Actual hours of production 4,900 labor hours
Standard price per kilogram $2.80
Standard kilograms per completed unit 6 kilograms
Standard hourly labor rate $18.00
Standard time per completed unit 1 hour
Actual total factory overhead $34,900
Actual fixed factory overhead $18,000
Standard fixed factory overhead rate $1.20 per labor hour
Standard variable factory overhead rate $3.80 per labor hour
Maximum plant capacity 15,000 hours
Units completed during the period 5,000
The direct materials cost variance is:.

Materials Cost Variance = 6500 favorable

Explanation:

Frogue Corporation

AP= Actual price per kilogram $2.50

AQ= Actual kilograms of material used 31,000

SP = Standard price per kilogram $2.80

SQ= Standard kilograms per completed unit 6 kilograms = 5000 units *6 kg= 30,000 kg

Material Price Variance =( AP -SP)(AQ)=

                                  =  ( $2.50- $2.80)31,000 = 9300 Favorable

It is favorable because the standard price is higher than the actual price.

Material Quantity  Variance  =( AQ -SQ)(AP)=  (31000- 30,000) 2.8

                                               = 1000*2.8=  2800 unfavorable

It is unfavorable because the standard quantity is lower than the actual quantity.

Materials Cost Variance =Material Price Variance+Material Quantity  Variance

                                      =9300 Favorable+2800 unfavorable=

Materials Cost Variance = 6500 favorable

When favorable and unfavorable are added the unfavorable is with negative sign so they are subtracted.

step 1: create a plan

step 2: inventory facility equipment/assets

step 3: create preventive maintenance procedures

step 4: create preventive maintenance schedules

step 5: train your maintenanceteam

step 6: analyze – adjust - improve

or

step 1 – pm procedure design: doing the effective things

step 2 – pm procedure scheduling: efficient use of people and resources

step 3 – pm lubrication engineering

step 4 – pm training: back on the chain gang

step 5 – pm program management plan

step 6 – communicate, communicate, communicate