TB MC Qu. 10-150 Majer Corporation makes a product with..
Majer Corporation makes a product with the following standard costs:
| Standard Quantity or Hours | Standard Price or Rate | Standard Cost Per Unit | |
| Direct materials | 6.7 ounces | $2.00 per ounce | $13.40 |
| Direct labor | 0.5 hours | $14.00 per hour | $7.00 |
| Variable overhead | 0.5 hours | $2.00 per hour | $1.00 |
The company reported the following results concerning this product in February
| Originally budgeted output | 5,300 units |
|---|---|
| Actual output | 4,900 units |
| Raw materials used in production | 30,400 ounces |
| Actual direct labor-hours | 7,920 hours |
| Purchases of raw materials | 32,800 ounces |
| Actual price of raw materials | $52.90 per ounce |
| Actual direct labor rate | $62.40 per hour |
| Actual variable overhead rate | $4.40 per hour |
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 variable overhead efficiency variance for February is:
Answer:- The materials quantity variance for February is = $4860 F.
Explanation-
Material Quantity variance = (Standard Quantity- Actual Quantity)*Standard price
=(32830 ounces – 30400 ounces)*$2.00 per ounce
= $4860 Favorable
Where:-
Standard Quantity = No. of yards per unit*Actual output
= 6.7 ounces per unit *4900 units
= 32830 ounces