Silmon Corporation makes a product with the following standard costs:

Standard Quantity or Hours Standard Price or Rate

Direct materials 5.1 grams $ 6.00 per gram

Direct labor 0.5 hours $ 13.00 per hour

Variable overhead 0.5 hours $ 2.00 per hour

The company produced 5,300 units in January using 39,410 grams of direct material and 2,390 direct labor-hours. During the month, the company purchased 44,500 grams of the direct material at $1.80 per gram. The actual direct labor rate was $20.30 per hour and the actual variable overhead rate was $6.90 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 January is:

Question

Business

Marvin

17 October, 09:32

Silmon Corporation makes a product with the following standard costs:

Standard Quantity or Hours Standard Price or Rate

Direct materials 5.1 grams $ 6.00 per gram

Direct labor 0.5 hours $ 13.00 per hour

Variable overhead 0.5 hours $ 2.00 per hour

The company produced 5,300 units in January using 39,410 grams of direct material and 2,390 direct labor-hours. During the month, the company purchased 44,500 grams of the direct material at $1.80 per gram. The actual direct labor rate was $20.30 per hour and the actual variable overhead rate was $6.90 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 January is:

+3

Answers (1)

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Sweety · Answer 1

Material quantity variance = $74, 280 unfavorable

Explanation:

The material quantity variance occurs when the actual quantity of material used to achieve a given level of output is more or less than the standard quantity expected.

For Silmon Corporation, it can be computed as follows:

Quantity variance is

Gram

5,300 units should have used (5300 * 5.1) 27,030

but did used 39,410

Variance in quantity 12,380 Unfavorable

Price per unit * $6

Material quantity variance $ 74,280. Unfavorable

Material quantity variance = $74, 280 unfavorable