Epley Corporation makes a product with the following standard costs: Picture In
ID: 2715499 • Letter: E
Question
Epley Corporation makes a product with the following standard costs: Picture In July the company produced 3,300 units using 12,240 pounds of the direct material and 2,760 direct labor-hours. During the month, the company purchased 13,000 pounds of the direct material at a cost of $35,100. The actual direct labor cost was $51,612 and the actual variable overhead cost was $20,148. 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 July is: $1,863 U $2,070 F $1,863 F $2,070 U
Explanation / Answer
Answer: Material Quantity Variance=(Standard Qty-Actual Qty)*standrd Price
=(11550-12240)*$3
=$2070 U
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