Majer Corporation makes a product with the following standard costs: The company

Question

Majer Corporation makes a product with the following standard costs:

The company reported the following results concerning this product in February.

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 February is:

Multiple Choice

$2,937 F

$3,000 F

$2,937 F

$3,000 U

Standard Quantity
or Hours Standard Price or
Rate Standard Cost Per Unit Direct materials 6.3 ounces $ 2.00 per ounce $ 12.60 Direct labor 0.3 hours $ 10.00 per hour $ 3.00 Variable overhead 0.3 hours $ 4.00 per hour $ 1.20

Explanation / Answer

Materials quantity variance = SR*(AQ-SQ) = 2*(30000-5000*6.3)= 3000 F Option 2 is correct

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