Eliezrie Corporation makes a product with the following standard costs: In Janua

Question

Eliezrie Corporation makes a product with the following standard costs:

In January the company's budgeted production was 7,400 units but the actual production was 7,500 units. The company used 45,580 kilos of the direct material and 2,030 direct labor-hours to produce this output. During the month, the company purchased 48,500 kilos of the direct material at a cost of $53,350. The actual direct labor cost was $18,473 and the actual variable overhead cost was $7,714.

The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.

The materials quantity variance for January is:

$3,487 F

$3,170 U

$3,170 F

$3,487 U

Please show all work

$3,487 F

$3,170 U

$3,170 F

$3,487 U

Please show all work

Explanation / Answer

Material Quantity Variance = ( Standards Qty- Actual Qty) Standard Rate (7400*6.5-45580)*1 (48100-45580) 2520 Favourable

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