The standard cost card for a product indicates that one unit of the product requires 6...
The standard cost card for a product indicates that one unit of
the product requires 6 kilograms of a raw material at $0.80 per
kilogram. The production of the product in April was 840 units, but
production had been budgeted for 820 units. During April, 7,900
kilograms of the raw material were purchased for $6,732 and 5,320
kilograms of the raw material were used in production. The material
variances for April were:
| Materials price variance | Materials quantity variance | |
| A) | $466U | $224U |
| B) | $466U | $460U |
| C) | $412U | $224U |
| D) | $412U | $460U |
Option A
Option B
Option C
Option D
Homework Answers
Correct answer--------Option C
Working
| Material Price Variance | ||||||
| ( | Standard Rate | - | Actual Rate | ) | x | Actual Quantity |
| ( | $ 0.80 | - | $ 0.85 | ) | x | 7900 |
| -412 | ||||||
| Variance | $ 412.00 | Unfavourable-U | ||||
| Material Quantity Variance | ||||||
| ( | Standard Quantity | - | Actual Quantity | ) | x | Standard Rate |
| ( | 5040 | - | 5320 | ) | x | $ 0.80 |
| -224 | ||||||
| Variance | $ 224.00 | Unfavourable-U | ||||
.
| Standard DATA for | 840 | units | |
| Quantity (SQ) | Rate (SR) | Standard Cost | |
| [A] | [B] | [A x B] | |
| Direct Material | ( 6 kilograms x 840 units)=5040 kilograms | $ 0.80 | $ 4,032.00 |
| Actual DATA for | 840 | units | |
| Quantity (AQ) | Rate (AR) | Actual Cost | |
| Direct Material | 5320 | $ 0.85 | $ 4,533.45 |
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