Kibodeaux Corporation makes a product with the following standard costs: The company budgeted for production of 3,300 units in June, but actual production was 3,400 units. The company used 33,240 liters of direct material and 320 direct labor-hours to produce this output. The company purchased 35,900 liters of the direct material at $4.90 per liter. The actual direct labor rate was $22.70 per hour and the actual variable overhead rate was $2.70 per hour.

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:
A)$392 U
B)$392 F
C)$400 F
D)$400 U

Question

Kibodeaux Corporation makes a product with the following standard costs:

The company budgeted for production of 3,300 units in June, but actual production was 3,400 units. The company used 33,240 liters of direct material and 320 direct labor-hours to produce this output. The company purchased 35,900 liters of the direct material at $4.90 per liter. The actual direct labor rate was $22.70 per hour and the actual variable overhead rate was $2.70 per hour.

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:

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:
A)$392 U 
B)$392 F 
C)$400 F 
D)$400 U

Quizplus · Accepted Answer

SQ = 3,400 units F1F1F1S1F1F1F10 9.8 liters per unit = 33,320 liters
Materials quantity variance = (AQ - SQ)SP
= (33,240 liters - 33,320 liters)$5.00 per liter
= (-80 liters)$5.00 per liter = $400 F

Kibodeaux Corporation Makes a Product with the Following Standard Costs