Fluegge 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 December:
The raw materials quantity variance for the month is closest to:
A) $48 U
B) $54 U
C) $54 F
D) $48 F

Question

Fluegge 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 December:
 The raw materials quantity variance for the month is closest to:
A) $48 U 
B) $54 U 
C) $54 F 
D) $48 F

Quizplus · Accepted Answer

SQ = 4,100 units × 5.7 liters per unit = 23,370 liters
Materials quantity variance = (AQ × SP) − (SQ × SP)
= (AQ - SQ) × SP
= (23,360 liters - 23,370 liters) × $5.40 per liter
= −10 liters × $5.40 per liter
= $54 F