Use the following information to answer questions 16-17 The Albright Company man

Question

Use the following information to answer questions 16-17 The Albright Company manufactures rubber parts for the automobile industry. The company had planned to produce 4,750 units according to November budget. Its material standard specifies a cost of $2.70 per. gallon and usage oraltons per unit. Variable manufacturing overhead is $2 per direct labor hour. Total standard direct labor hours allowed in November budget is 2,375,hours tor the month. Total direct labor costs are budgeted to be $19,000. During November, the company made 4,000 units and incurred the following costs: Direct materials purchased: Direct materials used: Direct labor used: Actual variable overhead: 8,100 gallons at 7,600 gallons 2,400 hours at S3.10 per gallon $8.25 per hour 16 Albright's materials quantity (or usage) variance for November was: X2 Sths 10142 A. S B. $ 3,240 F 4,320 F A HAR AHSR 1.320 U R 320 U I R1D0 E. None of the above

Explanation / Answer

SQ 6000 1.5*4000 SP 2.7 AQ 7600 AP 3.1 Material Quantity Variance SP*(SQ - AQ) 2.7*(6000 - 7600) 2.7*(- 1600) -4320 4320 Unfavourable Therefore, the right answer is option (d) $ 4320 U

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