Kibodeaux Corporation makes a product with the following standard costs: The com

Question

Kibodeaux Corporation makes a product with the following standard costs:

    
The company budgeted for production of 3,300 units in June, but actual production was 3,400 units. The company used 29,920 liters of direct material and 1,640 direct labor-hours to produce this output. The company purchased 31,920 liters of the direct material at $5.90 per liter. The actual direct labor rate was $23.60 per hour and the actual variable overhead rate was $2.60 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 June is:

$2,040 F

$890 F

$890 U

$2,040 U

Kibodeaux Corporation makes a product with the following standard costs:

Explanation / Answer

$2,040 F Particulars Standard Actual Qty Rate amount Qty Rate amount Materials    30,260.00           6.00    181,560.00    29,920.00            5.90    176,528.00 Actual output      3,400.00 Materials reqd(3,400*8.9)    30,260.00 DMQV= (SQ-AQ)SP DMQV= (30260 - 29920)6 DMQV= (340)6 DMQV= 2,040 F

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