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

$8,280 F

$8,217 F

$8,280 U

$8,217 U

Standard Quantity
or Hours Standard Price or
Rate Standard Cost Per Unit Direct materials 6.2 ounces $ 3.00 per ounce $ 18.60 Direct labor 0.1 hours $ 13.00 per hour $ 1.30 Variable overhead 0.1 hours $ 3.00 per hour $ 0.30

Explanation / Answer

Standard Quantity (SQ)

5800*6.2

35960

Standard Price (SP)

3

Actual Quantity (AQ)

33200

Material Quantity Variance

SP*(SQ - AQ)

3*(35960 - 33200)

3*(2760)

8280 Favourable

Therefore, the right answer is option (A) 8280 F

Standard Quantity (SQ)

5800*6.2

35960

Standard Price (SP)

3

Actual Quantity (AQ)

33200

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