Tharaldson Corporation makes a product with the following standard costs Standar

Question

Tharaldson Corporation makes a product with the following standard costs Standard Standard Quantity or Standard Price or Cost Per Rate Unit Direct materials Direct labor Variable overhead Hours 5.7 ounces 0.8 hours 0.8 hours 6.00 per ounce $34.20 S 8.80 S 4.80 $11.00 per hour $ 6.00 per hour The company reported the following results concerning this product in June Originally budgeted output Actual output Raw materials used in production Purchases of raw materials Actual direct labor-hours Actual cost of raw materials purchases 3,900 units 3,500 units 22,500 ounces 20,600 ounces 6,000 hours ctual direct labor cost Actual variable overheadcost $ 42,400 $ 13,900 $ 3,950 The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased The materials quantity variance for June is:

Explanation / Answer

B. $15,300 U

SQ = 3,500 units × 5.7 = 19,950

Materials quantity variance = (AQ ? SQ) SP

= (22,500 ? 19,950) $6.00

= $15,300 U

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