Snuggs Corporation makes a product with the following standard costs: The company reported the following results concerning this product in October. 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 October is:
A)$1,798 U
B)$1,798 F
C)$1,740 F
D)$1,740 U

Question

Snuggs Corporation makes a product with the following standard costs:  The company reported the following results concerning this product in October.  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 October is:
A)$1,798 U 
B)$1,798 F 
C)$1,740 F 
D)$1,740 U

Quizplus · Accepted Answer

SQ = 2.8 ounces per unit F1F1F1S1F1F1F10 1,100 units = 3,080 ounces
Materials quantity variance = (AQ - SQ)SP
= (2,790 ounces - 3,080 ounces)$6.00 per ounce
= (-290 ounces)$6.00 per ounce = $1,740 F

Snuggs Corporation Makes a Product with the Following Standard Costs