28.0k views
4 votes
Google Company reports the following standards for one key product: Standard Quantity or Hours Standard Price or Rate Standard Cost Per Unit Direct materials 6.3 ounces $ 2.00 per ounce $ 12.60 Direct labor 0.8 hours $ 18.00 per hour $ 14.40 Variable overhead 0.8 hours $ 2.00 per hour $ 1.60 Google reported the following results for this product in February. Originally budgeted output 4,800 units Actual output 5,100 units Raw materials used in production 30,300 ounces Actual direct labor-hours 1,830 hours Purchases of raw materials 34,200 ounces Actual price of raw materials $ 77.10 per ounce Actual direct labor rate $ 67.60 per hour Actual variable overhead rate $ 5.90 per hour Google applies variable overhead on the basis of direct labor-hours. The direct materials quantity variance for February is: Multiple Choice $3,660 F $3,597 F $3,660 U $3,597 U

User Sembiance
by
9.2k points

1 Answer

2 votes

Answer:

Direct material quantity variance= $3,660 unfavorable

Step-by-step explanation:

Giving the following information:

Standard Quantity= 6.3 ounces per unit

Standard cost= $2 per ounce

Actual output 5,100 units

Raw materials used in production= 30,300 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= (5,100*6.3 - 30,300)*2

Direct material quantity variance= $3,660 unfavorable

It is unfavorable because they use more ounces than estimated.

User Jacques Carette
by
8.3k points

No related questions found

Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.