JAX Inc.
In early 2009, US company JAX Inc. had budgeted for the production and sales of 6000 units at a sales price of $20 per unit. The following information is available regarding the standard cost for each unit:
Number of units produced
$\begin{array}{ll}
\quad \text { and sold: } & 6800 \text { units } \
\text { Sales revenue: } & \$ 149600(\$ 22 \text { per unit) } \
\text { Direct materials cost: } & \$ 43384(14960 \text { lbs purchased and used at } \$ 2.90 \text { per lb) } \
\text { Direct labour cost: } & \$ 59024(210800 \text { minutes at } \$ .28 \text { per minute })
\end{array}$
-What was JAX Inc.'s direct materials usage variance for 2009?
A) $4080 F
B) $4080 U
C) $2584 F
D) $2584 U

Question

Quizplus · Accepted Answer

The direct materials usage variance is calculated as the difference between the actual quantity of materials used and the standard quantity of materials that should have been used, multiplied by the standard price per unit. In this case, the actual quantity of materials used is 14960 lbs, the standard quantity of materials that should have been used is 6000 units * 2.5 lbs per unit = 15000 lbs, and the standard price per unit is $2.90. Therefore, the direct materials usage variance is (14960 - 15000) * $2.90 = $4080 U.

JAX Inc in Early 2009, US Company JAX Inc -What Was JAX Inc

JAX Inc
in Early 2009, US Company JAX Inc -What Was JAX Inc