Tharaldson Corporation makes a product with the following standard costs: Standa

Question

Tharaldson Corporation makes a product with the following standard costs: Standard Standard Quantity or Standard Price or Cost Per Hours Rate Unit 5.6 ounces $ 7.00 per ounce $39.20 0.7 hours $10.00 per hour $ 7.00 0.7 hours $ 7.00 per hour $ 4.90 Direct materials Direct labor Variable overhead The company reported the following results concerning this product in June. Originally budgeted output Actual output Raw materials used in production Purchases of raw materials Actual direct labor-hours Actual cost of raw materials purchases Actual direct labor cost 4,000 units 4,000 units 23,000 ounces 20,500 ounces 5,500 hours $ 42,500 $14,000

Explanation / Answer

$4,200 U

Material Quantity Variance Formula= (Standard Quantity for Actual Output - Actual Quantity) X Standard Price = [(4,000 units x 5.6 ounces ) - 23,000 ounces] X $7.00 = $4,200 Unfavourable

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