Tharaldson Corporation makes a product with the following standard costs:
The company reported the following results concerning this product in June.
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 is:
A) $2,242 U
B) $2,242 F
C) $2,360 U
D) $2,360 F

Question

Tharaldson Corporation makes a product with the following standard costs:
  The company reported the following results concerning this product in June.
  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 is:
A) $2,242 U 
B) $2,242 F 
C) $2,360 U 
D) $2,360 F

Quizplus · Accepted Answer

SQ = 2,800 units × 6.5 ounces per unit = 18,200 ounces
Materials quantity variance = (AQ - SQ) × SP
= (19,380 ounces − 18,200 ounces) × $2.00 per ounce
= (1, 80 ounces) × $2.00 per ounce
= $2,360 U

Tharaldson Corporation Makes a Product with the Following Standard Costs