In early 2015, Ryan, Inc. had budgeted for the production and sales of 6,000 uni
ID: 2577019 • Letter: I
Question
In early 2015, Ryan, Inc. had budgeted for the production and sales of 6,000 units at a sales price of $20 per unit. The following information is available regarding the standard cost for each unit: Direct materials: Direct labor 2 pounds at $3.00 per lb 30 minutes of assembly at $.25 per minute Actual results for 2015 were determined to be as follows: Number of units produced and sold: Sales revenue: Direct materials cost: Direct labor cost: 6,800 units $149,600 ($22 per unit) $43,384 (14,960 lbs purchased and used at $2.90 per lb) $59,024 (210,800 minutes at $.28 per minute) Refer to the Ryan Inc. information above. What was Ryan's direct materials usage variance for 2015? Selected Answer: b.$2,584 F Answers: 03 a, $4,080 F b. $2,584 . $2,584 d. $4,080uExplanation / Answer
Answer:- Material Usage variance = (Standard Quantity- Actual Quantity)*Standard price
=(13600 lbs – 14960 lbs)*$3.00 per lbs
= $4080 U
Where:-
Standard quantity = Pounds per unit lbs*Actual units
=2 pounds per unit lbs*6800 units
= 13600 lbs