Question
Bryan Company employs a standard cost system in which direct materials inventory is carried at standard cost. Bryan has established the following standards for the
Bryan Company employs a standard cost system in which direct materials inventory is carried at standard cost. Bryan has established the following standards for the prime costs of one unit of product:
Standard Quantity | Standard Price | Standard Cost | |
Direct materials | 6.0 grams | $3.50/gram | $21.00 |
Direct labour | 1.3 hours | $11.00/hour | 14.30 |
$35.30 |
During March, Bryan purchased 170,000 grams of direct material at a total cost of $585,750. The total factory wages for March were $400,000, 90 percent of which were for direct labour. Bryan manufactured 25,000 units of product during March using 151,000 grams of direct material and 32,000 direct labour hours.
The direct material quantity variance for March is:
$3,500 unfavourable. | ||
$3,500 favourable. | ||
$3,550 favourable. | ||
$3,550 unfavourable. |
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