Question 15 0.7 points Save Answer The standard cost of Product B includes 2 uni

Question

Question 15 0.7 points Save Answer The standard cost of Product B includes 2 units of DM at $4 per unit. During June, 20,357 units of Dm were purchased and used at a cost of $3.6 per unit to produce 10000 units of Product B. Compute the variance requested below and indicate whether the variance is favorable or unfavorable, by indicating U or F. Place the letter by the number, DO NOT add a space. Example, if the variance is 100 unfavorable, enter 100U (DO NOT PUT 100 U) The Direct Materials Quantity variance is $

Explanation / Answer

Direct Materials Quantity Variance = Standard Price * ( Actual Quantity - Standard Quantity)

= $ 4 * [( 20,357) - ( 10,000 * 2)]

= $ 4 * [20,357-20,000]

= $ 1,428 Unfavorable

Since the Actual Quantity is more than the Standard Quantity, the Variance is Unfavorable

Hence the correct answer is 1428U

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