Cheerios is a brand of cereal manufactured by General Mills in the United States, consisting of pulverized oats. General Mills management has established the following standards: Standard Quantity or Standard Price or Hours Rate Direct materials 3.5 grams $ 1.00 per gram Direct labor 0.7 hours $ 11.00 per hour Variable overhead 0.7 hours $ 2.00 per hour The company reported the following results concerning this product in July, Actual output 3.000 units Raw materials used in production 11.370 grams Actual direct labor-hours 1.910 hours Purchases of raw materials 12.100 grams Actual price of raw materials purchased $ 1.20 per gram Actual direct labor rate $ 11.40 per hour Actual variable overhead rate $ 2.10 per hour The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials purchased 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 July is: Material Price Variance = (AP-SP) AQP AP actual price per unit of material SP = standard price per unit of material AQP = actual quantity of material purchased Material Quantity Variance - (AQU-SQ) SP AQU - actual quantity of material used SQ standard quantity of material for the actual level of production SP = standard price per unit of material Multiple Choice $1044 U $870 AQ actual quantity of material used SQ = standard quantity of material for the actual level of production SP - standard price per unit of material Multiple Choice $1,044 U $870 U $870F $1.044 F