Dirickson Inc. has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours. The company has reported the following actual results for the product for July:
The raw materials quantity variance for the month is closest to:
A) $86 U
B) $86 F
C) $94 U
D) $94 F

Question

Dirickson Inc. has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours.  The company has reported the following actual results for the product for July:
 The raw materials quantity variance for the month is closest to:
A) $86 U 
B) $86 F 
C) $94 U 
D) $94 F

Quizplus · Accepted Answer

SQ = 7,600 units × 7.6 ounces per unit = 57,760 ounces
Materials quantity variance = (AQ × SP) − (SQ × SP)
= (AQ - SQ) × SP
= (57,750 ounces - 57,760 ounces) × $9.40 per ounce
= −10 ounces × $9.40 per ounce
= $94 F