TB MC Qu. 10-138 Tharaldson Corporation makes Tharaldson Corporation makes a pro
ID: 2581176 • Letter: T
Question
TB MC Qu. 10-138 Tharaldson Corporation makes Tharaldson Corporation makes a product with the following standard costs Standard Quantity or Hours 6.2 ounces 0.7 hours 0.7 hours Standard Standard Price or Cost Per Direct materials Direct labor Variable overhead Rate $ 7.00 per ounce $ 10.00 per hour $ 7.00 per hour Unit $43.40 $ 7.e0 $ 4.90 The company reported the following results concerning this product in June Originally budgeted output Actual output Raw materials used in production Purchases of raw materials Actual direct labor-hours Actual cost of raw materials purchases Actual direct labor cost Actual variable overhead cost 3,400 units 2,800 units 28,000 ounces 21,100 ounces 4, 500 hours $ 41,900 $ 13,40e $ 3,70e 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 isExplanation / Answer
Standard Quantity
2800*6.2
17360
Standard Price
7
Actual Quantity
21100
Material Quantity Variance
Standard Price*(Standard Quantity - Actual Quantity)
(Standard Price*Standard Quantity) - (Standard Price*Actual Quantity)
(7*17360) - (7*21100)
-26180
Material Quantity Variance = 26180 Unfavourable
Standard Quantity
2800*6.2
17360
Standard Price
7
Actual Quantity
21100
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