In July the company produced 4,600 units using 10,120 pounds of the direct mater
ID: 2450989 • Letter: I
Question
In July the company produced 4,600 units using 10,120 pounds of the direct material and 2,100 direct labor-hours. During the month, the company purchased 10,690 pounds of the direct material at a cost of $76,570. The actual direct labor cost was $38,256 and the actual variable overhead cost was $11,957.
The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.
A) $1,600 U
B) $1,740 F
C) $6,440 U
D) $1,600 F
Epley Corporation makes a product with the following standard costs:Explanation / Answer
SQ = Actual Output * Standard Qty
= 4600 units * 2 pounds
= 9200 pounds
Material Qty variance = ( Actual Qty - Standard Qty) * Standard Price
= (10120 - 9200) * 7
= 6440 U
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