Question
Scentsational Inc. produces a lavender air-freshener unit. They have developed standard costs for one unit as follows: Standard quantity or hours per unit Standard price
Scentsational Inc. produces a lavender air-freshener unit. They have developed standard costs for one unit as follows:
Standard quantity or hours per unit | Standard price or rate | Standard cost | |
---|---|---|---|
Direct materials | 0.4 ounces | $12.50 per ounce | $5.00 |
Direct labor | 2.1 dlh | $14.00 per dlh | $29.40 |
Variable manufacturing overhead | 2.1 dlh | $3.50 per dlh | $7.35 |
During May, the following activities were recorded related to the production of the air-freshener:
a) The company purchased 14,550 ounces of direct materials at a unit cost of $13.50 per ounce.
b) There was no beginning inventory of direct materials, but there was ending inventory of 1,540 ounces.
c) The companys production-line assemblers worked for 70,000 hours. They were paid a wage rate of $13.00 per hour.
e) Variable manufacturing overhead is allocated on the basis of direct labor hours. The total VMOH cost for the month was $210,000.
f) 35,000 units were produced and sold during May.
What was the direct materials price variance for May?
Multiple Choice
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$35,000 U
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$14,550 U
-
$13,010 U
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$21,425 U
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