Landram Corporation makes a product with the following standard costs: In March the company produced 4,700 units using 10,230 kilos of the direct material and 2,210 direct labor-hours. During the month, the company purchased 10,800 kilos of the direct material at a cost of $76,680. The actual direct labor cost was $38,233 and the actual variable overhead cost was $11,934.

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 March is:
A)$5,810 F
B)$5,893 U
C)$5,893 F
D)$5,810 U

Question

Landram Corporation makes a product with the following standard costs:

In March the company produced 4,700 units using 10,230 kilos of the direct material and 2,210 direct labor-hours. During the month, the company purchased 10,800 kilos of the direct material at a cost of $76,680. The actual direct labor cost was $38,233 and the actual variable overhead cost was $11,934.

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 March 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 March is:
A)$5,810 F 
B)$5,893 U 
C)$5,893 F 
D)$5,810 U

Quizplus · Accepted Answer

SQ = 4,700 units F1F1F1S1F1F1F10 2.0 kilos per unit = 9,400 kilos
Materials quantity variance = (AQ - SQ)SP
= (10,230 kilos - 9,400 kilos)$7.00 per kilo
= (830 kilos)$7.00 per kilo = $5,810 U

Landram Corporation Makes a Product with the Following Standard Costs