Question
Dalton Company uses a standard costing system with direct labors hours being the basis (cost driver) for applying overhead. Dalton Companys standard cost card shows
Dalton Company uses a standard costing system with direct labors hours being the basis (cost driver) for applying overhead.
Dalton Companys standard cost card shows the following for one unit of product Beta.
| Std Qty | Std price (rate) | Std. cost |
Direct materials | 3.0 pounds | $14.00 per pound | $42.00 |
Direct labor | 2.0 hours | $22.00 per hour | $44.00 |
Variable Overhead | 2.0 hours | $1.50 per DL hour | $ 3.00 |
Fixed Overhead | 2.0 hours | $10.00 per DL hour | $ 20.00 |
|
|
| $109.00 |
During the month of June the following was recorded by the company relative to its production of product Beta:
Planned level of production | 5,000 units |
Actual level of production | 4,950 units |
Direct materials purchased | 14,500 pounds |
Cost of direct materials purchased | $191,400 |
Direct materials placed into production | 14,750 pounds |
Direct labor incurred | 9,840 hours |
Actual direct labor cost | $222,384 |
Actual variable overhead cost | $16,236 |
Actual fixed overhead cost | $93,972 |
Compute the Direct Materials price variance for the month.
Multiple Choice
-
$11,600 F
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$11,800 F
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$11,800 U
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$11,880 F
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