Question
A company uses the following standard costs to produce a single unit of output. Direct materials 7 pounds at $0.9 per pound=$6.30 Direct labor 0.20
A company uses the following standard costs to produce a single unit of output.
Direct materials 7 pounds at $0.9 per pound=$6.30
Direct labor 0.20 hour at $9.00 per hour=$1.80
Manufacturing overhead 0.20 hour at $4.70 per hour=$.94
During the latest month, the company purchased and used 67,000 pounds of direct materials at a price of $1.10 per pound to produce 10,000 units of output. Direct labor costs for the month totaled $14,620 based on 1,700 direct labor hours worked. Variable manufacturing overhead costs incurred totaled $6,400 and fixed manufacturing overhead incurred was $17,000. Based on this information, the direct materials quantity variance for the month was:
- $13,400 unfavorable
- $2,700 unfavorable
- $2,700 favorable
- $2,000 favorable
- $13,400 favorable
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