The following data is given for the stringer Company: Determine the direct mater

Question

The following data is given for the stringer Company:

Determine the direct material quantity variance.

Select the correct answer.

Budgeted production 1,035 units Actual production   916 units Materials:     Standard price per ounce $1.83     Standard ounces per completed unit 10      Actual ounces purchased and used in production 8,885     Actual price paid for materials $18,214 Labor:     Standard hourly labor rate $15.00 per hour     Standard hours allowed per completed unit 4.0      Actual labor hours worked 4,717.4     Actual total labor costs $71,940 Overhead:     Actual and budgeted fixed overhead $1,107,696     Standard variable overhead rate $26.00 per standard labor hour      Actual variable overhead costs $132,087 Overhead is applied on standard labor hours.

Explanation / Answer

Hi,

Please find the answer as follows:

Direct Material Qty Variance = Standard Rate*(Actual Material - Standard Material) = 1.83*(8885 - 916*10) = 503 (F)

Option C is correct.

Thanks.

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