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Sloan [31]
3 years ago
15

Cost standards for one unit of product no. C77: Direct material 3 pounds at $2.50 per pound $ 7.50 Direct labor 5 hours at $7.50

per hour 37.50 Actual results: Units produced 7,800 units Direct material purchased 26,000 pounds at $2.70 $ 70,200 Direct material used 23,100 pounds at $2.70 62,370 Direct labor 40,100 hours at $7.30 292,730 Use the information to compute the following variances. The direct-material quantity variance is:
Business
1 answer:
xxMikexx [17]3 years ago
7 0

Answer:

Usage variance=$750

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>

<em>                                                                                  Pounds</em>

7,800 units should have used ( 7,800× 3)           23,400

but did use                                                               <u>23,100</u>

Usage variance                                                         300      

×    standard price                                                    <u>$2.50</u><u> </u>    

Usage variance                                                      <u>    $750</u> favorable

Usage variance   =$750                      

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