Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Tharaldson Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price or Rate Standard Cost Per Unit Direct materials 5.6
Tharaldson Corporation makes a product with the following standard costs:
Standard Quantity or Hours | Standard Price or Rate | Standard Cost Per Unit | |||||||
Direct materials | 5.6 | ounces | $ | 7.00 | per ounce | $ | 39.20 | ||
Direct labor | 0.7 | hours | $ | 10.00 | per hour | $ | 7.00 | ||
Variable overhead | 0.7 | hours | $ | 7.00 | per hour | $ | 4.90 | ||
The company reported the following results concerning this product in June.
Originally budgeted output | 4,000 | units | |
Actual output | 4,000 | units | |
Raw materials used in production | 23,000 | ounces | |
Purchases of raw materials | 20,500 | ounces | |
Actual direct labor-hours | 5,500 | hours | |
Actual cost of raw materials purchases | $ | 42,500 | |
Actual direct labor cost | $ | 14,000 | |
Actual variable overhead cost | $ | 4,000 | |
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 June is:
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started