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

Question

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

Quizplus · Accepted Answer

SQ = 4,200 units × 3.0 ounces per unit = 12,600 ounces
Materials quantity variance = (AQ - SQ)× SP
= (12,820 ounces − 12,600 ounces)× $7.00 per ounce
= (220 ounces)× $7.00 per ounce
= $1,540 U

Oddo Corporation Makes a Product with the Following Standard Costs