Lindros Corporation makes hockey pucks, Following are the standard costs for pro

Question

Lindros Corporation makes hockey pucks, Following are the standard costs for producing the hockey pucks:

In June Lindros produced 4,800 hockey pucks using 10,290 kilos of the direct material and 2,270 direct labor-hours. During the month, Lindros purchased 10,860 kilos of the direct material at a cost of $76,740. The actual direct labor cost reported by Lindros was $38,239 and the actual variable overhead cost was $11,940.

The materials price variance for June is: (Do not round intermediate calculations.)

Multiple Choice

A.) $720 F

B.) $720 U

C.) $580 U

D.) $580 F

  Inputs Standard Quantity or Hours Standard Price or Rate   Direct materials                  2.0 kilos            $7.00 per kilo   Direct labor                  1.1 hours            $13.00 per hour   Variable overhead                  1.1 hours            $7.00 per hour

Explanation / Answer

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

= (7*10860-76740)

Material price variance = 720 U

so answer is b) $720 U

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