Question
Miguez Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price or Rate Standard Cost Per Unit Direct materials 2.3
Miguez Corporation makes a product with the following standard costs:
Standard Quantity or Hours | Standard Price or Rate | Standard Cost Per Unit | ||||||||
Direct materials | 2.3 | liters | $ | 7.00 | per liter | $ | 16.10 | |||
Direct labor | 0.7 | hours | $ | 22.00 | per hour | $ | 15.40 | |||
Variable overhead | 0.7 | hours | $ | 2.00 | per hour | $ | 1.40 | |||
The company budgeted for production of 2,600 units in September, but actual production was 2,500 units. The company used 5,440 liters of direct material and 1,680 direct labor-hours to produce this output. The company purchased 5,800 liters of the direct material at $7.20 per liter. The actual direct labor rate was $24.10 per hour and the actual variable overhead rate was $1.90 per hour.
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 price variance for September is:
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