Question

Hurren Corporation makes a product with the following standard costs! Direct materials Direct labor Variable overhead Standard Quantity of Standard Price or Hours Rate 3.5 grams $7.00 per gram 1.0 hours $10.00 per hour 10 hours $7.00 per hour Standard Cost Per Unit $24.50 $10.00 $7.00 The company reported the following results concerning this product in J Originally budgeted output 1 Actual output Raw materials used in production Actual direct labor-hours Purchases of raw materials Actual price of raw materials purchased Actual direct labor rate Actual variable overhead rate 8.400 units 8.300 units 28.290 grams 3.600 hours 30.900 grams $7.10 per gram $10.90 per hour $6.70 per hour ES material. Durch The company applies variable overhead on the basis variance is computed when the materials are The materials quantity variance for June is O $5,320 U O $5.396 F O $5,320 F O 5,396 U

Answer 1

Answer is “$5,320 F”

Standard quantity per unit = 3.50 grams
Actual output = 8,300 units
Standard price per gram = $7.00
Actual quantity used = 28,290 grams

Standard quantity allowed = Standard quantity per unit * Actual output
Standard quantity allowed = 3.50 * 8,300
Standard quantity allowed = 29,050 grams

Materials quantity variance = Standard price per gram * (Actual quantity used - Standard quantity allowed)
Materials quantity variance = $7.00 * (28,290 - 29,050)
Materials quantity variance = $5,320 Favorable