Question

idd Corporation makes a product with the following standard costs:

	Standard Quantity or Hours	Standard Price or Rate	Standard Cost Per Unit
Direct materials	4.4 grams	$2.00 per gram	$8.80
Direct labor	0.5 hours	$15.00 per hour	$7.50
Variable overhead	0.5 hours	$2.00 per hour	$1.00

The company reported the following results concerning this product in November.

Originally budgeted output	9,200	units
Actual output	9,300	units
Raw materials used in production	44,760	grams
Purchases of raw materials	47,250	grams
Actual direct labor-hours	7,820	hours
Actual cost of raw materials purchases	$132,390
Actual direct labor cost	$125,083
Actual variable overhead cost	$13,866

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 November is:

$7,680 U

$10,759 U

$7,680 F

$10,759 F

Answer 1