Talladega Industries, Inc., (TII) developed the following standard costs for dir

Question

Talladega Industries, Inc., (TII) developed the following standard costs for direct material and direct labor for one of their major products, the 10-gallon plastic container. Standard quantity Standard price Direct materials 0.10 pounds $30 per pound Direct labor 0.05 hours $15 per hour During August, TII produced and sold 10,000 containers using 980 pounds of direct materials at an average cost per pound of $32 and 500 direct labor hours at an average wage of $15.25 per hour. August's direct material quantity variance was: Select one: a. $1,960 unfavorable. b. $600 favorable. c. $1,360 favorable. d. None of the above is correct.

Explanation / Answer

Material quantity variance = ( standard quantity - actual quantity) * standard price          standard          Actual quantity price quantity price Material 0.1 30 0.098 32 Material quantity variance = ( 0.1*10000 -980) * 30                = (1000 - 980) * 30               = 20 * 30                = 600 Favourable Hence option b is correct

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.