The company produced 4,500 units in April using 10,210 liters of direct material
ID: 2473935 • Letter: T
Question
The company produced 4,500 units in April using 10,210 liters of direct material and 2,190 direct labor-hours. During the month, the company purchased 10,780 liters of the direct material at $7.20. per liter. The actual direct labor rate was $15.60 per hour and the actual variable overhead rate was $2.90 per hour.
$8,470 U
$8,470 F
$8,712 F
$8,712 U
A manufacturing company that has only one product has established the following standards for its variable manufacturing overhead. Variable manufacturing overhead standards are based on machine-hours.
$6,608 F
$6,889 U
$6,608 U
$6,889 F
Landram Corporation makes a product with the following standard costs:Explanation / Answer
Calculation of materials quantity variance for April:
Formula :
Materials quantity variance = (Actual Quantity – Standard Quantity) * Standard Price
Actual Quantity = 10210 Liters
Standard Quantity = Actual Units Produced * Standard Direct materials per unit = 4500 units * 2 liters = 9000 Liters
Standard Price = $7.00 per liter
Hence,
Materials quantity variance = (10210-9000)*7
= $8470 U