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 planning variance was: Select one: a. $268,640 favorable. b. $270,600 unfavorable. c. $1,360 unfavorable. d. Indeterminable using the above information.

Explanation / Answer

Answer:

The direct material planning variance is (d) Indeterminable using the above information as there's no information regarding the original budgeted materials and original budgeted units to be produced as without this information, Planning variance cannot be figured out.

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