The following data is given for the Stringer Company: The direct materials quant
ID: 2599220 • Letter: T
Question
The following data is given for the Stringer Company:
The direct materials quantity variance is
Budgeted production 900 units Actual production 1,056 units Materials: Standard price per ounce $1.9 Standard ounces per completed unit 12 Actual ounces purchased and used in production 13,052 Actual price paid for materials $26,757 Labor: Standard hourly labor rate $14.30 per hour Standard hours allowed per completed unit 5.0 Actual labor hours worked 5,438.4 Actual total labor costs $82,936 Overhead: Actual and budgeted fixed overhead $1,153,000 Standard variable overhead rate $28.00 per standard labor hour Actual variable overhead costs $152,275 Overhead is applied on standard labor hours.Explanation / Answer
Direct materials quantity variance
= ( Standard quantity allowed - Actual Quantity Used ) * Standard Price of a Unit of Direct Material
Standard quantity allowed = Standard ounces per completed unit * Actual production = 12 * 1,056 units = 12,672
Actual Quantity Used = 13,052 (given) ; Standard Price of a Unit of Direct Material = $1.9 (given)
Direct materials quantity variance = ( 13,052 - 12,672 ) * $1.9 = $722 Unfavorable
Explanation : Since actual quantity of direct material used is more than the standard quantity of direct material allowed the resultant direct materials quantity variance is unfavorable