Turrubiates Corporation makes a product that uses a material with the following

Question

Turrubiates Corporation makes a product that uses a material with the following standards:

The company budgeted for production of 3,500 units in April, but actual production was 3,600 units. The company used 28,400 liters of direct material to produce this output. The company purchased 19,800 liters of the direct material at $2.3 per liter.

The direct materials purchases variance is computed when the materials are purchased.

The materials quantity variance for April is:

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Multiple Choice

$1,564 U

$1,496 U

$1,564 F

$1,496 F

.

he following labor standards have been established for a particular product:

The following data pertain to operations concerning the product for the last month:

What is the labor efficiency variance for the month?

Multiple Choice

$30,620 F

$30,620 U

$27,060 F

$27,940 F

Standard quantity 7.7 liters per unit Standard price $ 2.20 per liter Standard cost $ 16.94 per unit

Explanation / Answer

Material quantity variance = (Standard quantity-actual quantity)Standard rate

                                           = (3600*7.7-28400)*2.2

Material quantity variance = 1496 U

so answer is b) $1496 U

Labour efficiency variance = (Standard hour-actual hour)Standard rate

                                            = (1000*8.9-6700)*12.70

Labour efficiency variance = 27940 F

so answer is d) $27940 F

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