20. Victoria, Inc., recently completed 52,000 units of a product that was expected to consume five pounds of direct material per finished unit. The standard price of the direct material was $9 per pound. If the firm purchased and consumed 268,000 pounds in manufacturing (cost = $2,304,800), the direct-materials quantity variance would be figured as:

A. $72,000F.

B. $72,000U.

C. $107,200F.

D. $107,200U.

E. none of the above.

Answer: B

21. Solo Corporation recently purchased 25,000 gallons of direct material at $5.60 per gallon. Usage by the end of the period amounted to 23,000 gallons. If the standard cost is $6.00 per gallon and the company believes in computing variances at the earliest point possible, the direct-material price variance would be calculated as:

A. $800F.

B. $9,200F.

C. $9,200U.

D. $10,000F.

E. $10,000U.

Answer: D

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