Ortman Corporation makes a product with the following standard costs: The company reported the following results concerning this product in May. 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 May is:

Question

Ortman Corporation makes a product with the following standard costs:  The company reported the following results concerning this product in May.  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 May is:

Quizplus · Accepted Answer

SQ = 1,600 units × 7.9 liters per unit = 12,640 liters
Materials quantity variance = (AQ - SQ)× SP
= (12,490 liters − 12,640 liters)× $8.00 per liter
= (−150 liters)× $8.00 per liter
= $1,200 F

Ortman Corporation Makes a Product with the Following Standard Costs