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23 December, 06:02

The following data are given for Stringer Company:

Budgeted production 932 units

Actual production 1,065 units

Materials:

Standard price per ounce $1.79

Standard ounces per completed unit 10

Actual ounces purchased and used in production 10,970

Actual price paid for materials $22,488

Labor:

Standard hourly labor rate $14.96 per hour

Standard hours allowed per completed unit 4.2

Actual labor hours worked 5,484.75

Actual total labor costs $83,642

Overhead:

Actual and budgeted fixed overhead $1,152,000

Standard variable overhead rate $27.00 per standard labor hour

Actual variable overhead costs $153,573

Overhead is applied on standard labor hours.

The direct materials quantity variance is

a. 2,851.70 favorable

b. 2,851.70 unfavorable

c. 572.80 unfavorable

d. 572.80 favorable

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Answers (1)
  1. 23 December, 06:23
    0
    c. 572.80 unfavorable

    Explanation:

    The computation of the direct material quantity variance is shown below:

    = Standard Price * (Standard Quantity - Actual Quantity)

    = $1.79 * (1,065 units * 10 - 10,970)

    = $1.79 * (10,650 - $10,970)

    = $1.79 * 320

    = $572.80 unfavorable

    Since the actual quantity is more than the standard quantity so in this case it is unfavorable variance

    We simply applied the above formula to find out the material quantity variance
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