Fluegge Inc. has provided the following data concerning one of the products in i
ID: 2394788 • Letter: F
Question
Fluegge Inc. has provided the following data concerning one of the products in its standard cost syst Variable manufacturing overhead is applied to products on the basis of direct labor-hours. Standard Quantity or Hours per Standard Price or Inputs Direct materials Direct labor Variable manufacturing overhead Unit of Output 5.7liters 0.70hours Rate S 5.40per liter 20.60per hour 0.70hours 5.50per hour The company has reported the following actual results for the product for December: Actual output Raw materials purchased Actual price of raw materials Actual cost of raw materials purcha Raw materials used in production Actual direct labor-hours Actual direct labor rate Actual direct labor cost Actual variable overhead rate Actual variable overhead cost 4,100units 25,100 liters 4.80 per liter S 120,480 23,360liters 2,700hours 21.20per hour S 57,240 S 5.90per hour S 15,930 36) The raw materials quantity variance for the month is closest to: A) $54 F B) $48 F C) $48 U D) S54 UExplanation / Answer
A. $ 54F
Explanation: Direct material quantity variance is used to calaculate the variance in the actual quantity of raw material utlised to the standard quantity of the material should have been utilised. Formula is :
Raw Material Quantity Variance= Standard Price (Standard Qty- Actual Qty)
=5.4 (23370-23360)
=54 F ( Since actual qty is less than the standard qty required , so variance is favourable)
Standard Quantity =4100*5.7 litres
=23,370 litres.