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Ivan
3 years ago
6

TB MC Qu. 10-144 (Algo) Doogan Corporation makes a product ... Doogan Corporation makes a product with the following standard co

sts: Standard Quantity or Hours Standard Price or Rate Direct materials 2.0 grams $ 7.00 per gram Direct labor 0.8 hours $ 16.00 per hour Variable overhead 0.8 hours $ 4.00 per hour The company produced 4,400 units in January using 10,140 grams of direct material and 2,120 direct labor-hours. During the month, the company purchased 10,710 grams of the direct material at $7.40 per gram. The actual direct labor rate was $16.95 per hour and the actual variable overhead rate was $3.70 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 January is:
Business
1 answer:
LiRa [457]3 years ago
3 0

Answer:

Material quantity variance = $9,380 adverse

Explanation:

<em>A material usage variance occurs when the standard quantity required to active a particular level of production is higher or lower than than the actual actual quantity used. A favorable variance would mean than less quantity of materials were used than the standard to achieve a given output level. And an adverse variance would mean the opposite</em>

We can calculate it as follows:

                                                                                         grams

4,400 units should have used (4,400× 2 grams)            8,800

but did use                                                                   <u>    10,140</u>

<u> </u>                                                                                    1,340 adverse

standard price per g                                                ×<u> $7______</u>

Material quantity variance                                    <u>       $ 9,380 adverse</u>

Material quantity variance = $9,380 Adverse

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