Landram Corporation makes a product with the following standard costs: The compa

Question

Landram Corporation makes a product with the following standard costs: The company produced 4,700 units in April using 10.280 liters of direct material and 2.260 direct labor-hours. During the month the company purchased 10.850 liters of the direct material at $7.30 per litter. The actual direct labor rate was $14.55 per hour and the actual variable overhead rate was $5.80 per hour. The company applies variable overhead on the basis of direct labour-hours. The direct materials purchases variance is computed when the materials are purchased. The materials quantity variance for April is: $6,160 U $6,424 U $6,424F $6,160 F

Explanation / Answer

Material Quantity Variance = (Standard Quantity - Actual Quanitity) * Standard Price (10,280 - (2*4,700)) * 7 = $6,160 U

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