46.Assume that the company computes variances at the earliest point in time. The

Question

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

None of these.

$5,750F.

$5,750U.

$750U.

$750F.

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

$5,320F.

None of these.

$5,120F.

$5,120U.

$5,320U.

48. Assume that the company computes variances at the earliest point in time. The direct-labor rate variance is:

$7,794F.

$8,220U.

None of these.

$7,794F.

$8,220F.

  Cost standards for one unit of product no. C77:      Direct material 3 pounds at $2.50 per pound $7.50      Direct labor 5 hours at $7.50 per hour 37.50   Actual results:      Units produced 8,100 units      Direct material purchased 26,600 pounds at $2.70 $71,820      Direct material used 24,000 pounds at $2.70 64,800      Direct labor 41,100 hours at $7.30 300,030

Explanation / Answer

46. Direct material quantity variance = ( Standard quantity for actual output - Actual quantity used ) x Standard price per unit = ( 3 x 8,100 - 24,000) x $ 2.50 = $ 750 F

47. Direct material price variance = ( Standard price per unit - Actual price per unit) x Actual quantity of materials purchased = ( $ 2.50 - $ 2.70) x 26,600 = $ 5,320 U

48. Direct labor rate variance = ( Standard rate per hour - Actual rate per hour) x Actual hours worked = ( $ 7.50 - $ 7.30 ) x 41,100 = $ 8,220 F

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