Multiple choice: A. 24000 F B. 24000 U C. 1989 U D. 1989 F Tharaldson Corporatio
ID: 2413025 • Letter: M
Question
Multiple choice:A. 24000 F B. 24000 U C. 1989 U D. 1989 F Tharaldson Corporation makes a product with the following standard costs: Standard Quantity or Hours Standan Standard Price or Cost Per Rate Unit Direct materials Direct labor Variable overhead 0.7 hours 0.7 hours 6.0 ounces 3.00 per ounce $18.00 $11.00 per hour $ 7.70 $ 9.00 per hour 6.36 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 Actual direct labor cost Actual variable overhead cost 3,600 units 3,200 units 21,000 ounces 22,100 ounces 5,000 hours $42,300 $13,600 $ 3,800
Explanation / Answer
Material price variance = Actual quantity* standard price - Actual quantity * actual price
Standard quantity of material = 6 ounces * 3600 units = 21600 ounces
Standard price = $3 per ounce
Actual quantity = 22,100 ounces
Actual price = actual cost of raw material purchase =$42,300
Therefore, Material Price Variance = Actual quantity * Standard price - Actual quantity * actual price
= 22,100 * 3 - 42,300
= 66,300 - 42,300
= 24,000 F
Hence option A is the correct answer.
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