302,250 Assume that the company computes variances at the earliest point in time

Question

302,250

Assume that the company computes variances at the earliest point in time. The direct-material quantity variance is:

$810F.

$810U.

$25,380U.

$25,380F.

None of these.

  Cost standards for one unit of product no. C77:      Direct material 3 pounds at $2.70 per pound $8.10      Direct labor 7 hours at $7.70 per hour 53.90   Actual results:      Units produced 5,600 units      Direct material purchased 26,200 pounds at $2.90 $75,980      Direct material used 16,500 pounds at $2.90 47,850      Direct labor 40,300 hours at $7.50

302,250

Explanation / Answer

Material quantity variance:

= Standard quantity×Standard cost per unit- Actual quantity×Standard cost per unit

= 3×5,600×$2.70 – 16,500×$2.70

= $810F

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