21. Degregorio Corporation makes a product that uses a material with the followi

Question

21. Degregorio Corporation makes a product that uses a material with the following direct material standards:

The company produced 6,300 units in November using 23,780 kilos of the material. During the month, the company purchased 25,950 kilos of the direct material at a total cost of $124,560. The direct materials purchases variance is computed when the materials are purchased.

The materials quantity variance for November is:

A. $2,350 F

B. $2,256 F

C. $2,350 U

D. $2,256 U

Explanation / Answer

The materials quantity variance =Standard Price * ( Actual Quantity - Standard Qunatity)

= $ 5 * [( 23,780 kilos) - ( 3.7 Kilos * 6,300 Units )

= $ 5 * ( 23,780- 23,310)

= $ 2,350 U

Since the Actual Quantity is more than the Standard Quantity, the Varianceis Unfavorable

Hence the correct answer is C. $2,350 U

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