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Tharaldson Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price or Rate Standard Cost Per Unit Direct materials 6.0
Tharaldson Corporation makes a product with the following standard costs:
Standard Quantity or Hours | Standard Price or Rate | Standard Cost Per Unit | |||||||
Direct materials | 6.0 | ounces | $ | 9.00 | per ounce | $ | 54.00 | ||
Direct labor | 0.7 | hours | $ | 11.00 | per hour | $ | 7.70 | ||
Variable overhead | 0.7 | hours | $ | 9.00 | per hour | $ | 6.30 | ||
The company reported the following results concerning this product in June.
Originally budgeted output | 3,600 | units | |
Actual output | 3,200 | units | |
Raw materials used in production | 21,000 | ounces | |
Purchases of raw materials | 20,900 | ounces | |
Actual direct labor-hours | 5,000 | hours | |
Actual cost of raw materials purchases | $ | 42,100 | |
Actual direct labor cost | $ | 13,600 | |
Actual variable overhead cost | $ | 3,800 | |
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:
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