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30 October, 06:53

Michael Corporation manufactures railroad cars, which is its only product. The standards for the railroad cars are as follows: Standard tons of direct material (steel) per car 22 Standard cost per ton of steel $ 16.00$16.00 During the month of March, the company produced 1 comma 5001,500 cars. Related production data for the month follows: Actual materials purchased and used (tons) 7 comma 0007,000 Actual direct materials total cost $ 118 comma 000$118,000 What is the direct materials quantity variance for the month?

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  1. 30 October, 09:20
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    Instructions are listed below.

    Explanation:

    Giving the following information:

    The standards for the railroad cars are as follows: Standard tons of direct material (steel) per car 22 Standard cost per ton of steel $16.00 During March, the company produced 1,500 cars. Related production data for the month follows: Actual materials purchased and used (tons) 7,000 Actual direct materials total cost $118,000

    Direct material quantity variance = (standard quantity - actual quantity) * standard price

    Direct material quantity variance = (33,000 - 7,000) * 16 = $416,000 unfavorable
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