The Litton Company has established standards as follows: Direct material: 3 poun

Question

The Litton Company has established standards as follows: Direct material: 3 pounds per unit @ $4 per pound = $12 per unit Direct labor: 2 hours per unit @ $8 per hour = $16 per unit Variable manufacturing overhead: 2 hours per unit @ $5 per hour = $10 per unit Actual production figures for the past year are given below. The company records the materials price variance when materials are purchased. The company applies variable manufacturing overhead to products on the basis of standard direct labor-hours. The materials quantity variance is: A) $800 U B) $4,000 U C) $760 U D) $760 F

Explanation / Answer

A

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