Question

Michael Corporation manufactures railroad​ cars, which is its only product. The standards for the railroad cars are as​ follows: Standard tons of direct material​ (steel) per car 22 Standard cost per ton of steel $ 16.00$16.00 During the month of​ March, the company produced 1 comma 5001,500 cars. Related production data for the month​ follows: Actual materials purchased and used​ (tons) 7 comma 0007,000 Actual direct materials total cost $ 118 comma 000$118,000 What is the direct materials quantity variance for the​ month?

Answer 1

Answer:

Instructions are listed below.

Explanation:

Giving the following information:

The standards for the railroad cars are as​ follows: Standard tons of direct material​ (steel) per car 22 Standard cost per ton of steel $16.00 During ​ March, the company produced 1,500 cars. Related production data for the month​ follows: Actual materials purchased and used​ (tons) 7,000 Actual direct materials total cost $118,000

Direct material quantity variance= (standard quantity - actual quantity)*standard price

Direct material quantity variance= (33,000 - 7,000)*16= $416,000 unfavorable