Question

Qu. 10-150 (Algo) 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 6.4 ounces $ 2.00 per ounce $ 12.80 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 February. Originally budgeted output 5,100 units Actual output 6,000 units Raw materials used in production 33,400 ounces Actual direct labor-hours 1,860 hours Purchases of raw materials 35,800 ounces Actual price of raw materials $ 47.10 per ounce Actual direct labor rate $ 37.60 per hour Actual variable overhead rate $ 5.60 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 materials quantity variance for February is:

Answer 1

Answer:

Direct material quantity variance= $10,000 favorable

Explanation:

Giving the following information:

Standard Direct materials 6.4 ounces $ 2.00 per ounce.

Actual output 6,000 units

Raw materials used in production 33,400 ounces

To calculate the direct material quantity variance, we need to use the following formula:

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

Direct material quantity variance= (6.4*6,000 - 33,400)*2

Direct material quantity variance= (38,400 - 33,400)*2

Direct material quantity variance= $10,000 favorable