Tharaldson Corporation makes a product with the following standard costs: The co
ID: 2580337 • Letter: T
Question
Tharaldson Corporation makes a product with the following standard costs:
The company reported the following results concerning this product in June.
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 price variance for June is:
Multiple Choice
$22,700 U
$22,700 F
$1,944 F
$1,944 U
Standard Quantity or Hours Standard Price or Rate Standard Cost Per Unit Direct materials 7.3 ounces $ 3.00 per ounce $ 21.90 Direct labor 0.7 hours $ 17.00 per hour $ 11.90 Variable overhead 0.7 hours $ 6.00 per hour $ 4.20Explanation / Answer
The materials price variance for June is $22,700 F Standard Actual Particulars Quantity Rate amount Quantity Rate amount Materials 16,790.00 3.00 50,370.00 21,600.00 1.9491 42,100.00 Actual output 2,300.00 Materials reqd (2300* 7.3) 16,790.00 DMPV = (SP-AP)*AQ purchased DMPV = (3 - 1.9491)21600 DMPV = (1.0509)21600 DMPV = 22,700 F
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