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oksian1 [2.3K]
3 years ago
7

Cullumber Manufacturing Company purchased 14600 switches to make 6300 units. The standard allows for 2 switches per unit. The co

mpany actually used 15100 to produce the 6300 units. Cullumber budgeted $0.75 per switch but had to pay $0.80 per switch. What is Cullumber’s direct materials quantity variance for the period?
a. $1875 favorable
b. $1000 favorable
c. $2000 unfavorable
d. $1875 unfavorable
Business
1 answer:
earnstyle [38]3 years ago
3 0

Answer:

d. $1,875 unfavorable

Explanation:

Direct material quantity variance is computed as;

= (AQ - SQ) × SP

AQ = Actual quantity = 6,300 units

SQ = Standard quantity = 14,200 / 2 = 7,300 units

SP = Standard price = $0.80

Direct material quantity variance

= (6,300 - 7,300) × 0.80

= -1,000 × $0.80

= -1,875 unfavorable

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