Question

Tharaldson Corporation makes a product with the following standard costs:
Standard Quantity or Hours Standard Price or Rate Standard Cost Per Unit
Direct materials 5.8 ounces $ 3.00 per ounce $ 17.40
Direct labor 0.9 hours $ 12.00 per hour $ 10.80
Variable overhead 0.9 hours $ 5.00 per hour $ 4.50
The company reported the following results concerning this product in June.
Originally budgeted output 3,800 units
Actual output 3,400 units
Raw materials used in production 20,800 ounces
Purchases of raw materials 21,900 ounces
Actual direct labor-hours 6,500 hours
Actual cost of raw materials purchases $ 42,500
Actual direct labor cost $ 13,800
Actual variable overhead cost $ 3,900
The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.Required:a. The materials quantity variance for June is ____________.

Answer 1

Answer:

Material Quantity Variance= $ 3240 Unfavorable

Explanation:

Given

Standard Quantity   Direct materials 5.8 ounces

Standard Price$ 3.00 per ounce * 5.8= $ 17.40

Actual output 3,400 units

Raw materials used in production 20,800 ounces

Purchases of raw materials 21,900

Working

Standard Material required for  3,400 units *5.8= 19720 ounces.

Standard Price for 19720 ounces* 3= $ 59160

Material Quantity Variance= (Standard Price * Actual Quantity)-(Standard Price * Standard Quantity)

Material Quantity Variance= 3*20,800 - (3* 19720)

Material Quantity Variance= $62400- $ 59160= $ 3240 Unfavorable

It is unfavorable because the actual quantity used is more than the standard usage.

Answer 2

The materials quantity variance for June is $ 3240 Unfavorable

Standard costs

Given to information following are:

The Standard Quantity Direct materials are 5.8 ounces

Then the Standard Price$ 3.00 per ounce * 5.8= $ 17.40

Actual output 3,400 units

Raw materials employed in production 20,800 ounces

Purchases of raw materials 21,900

Working note

Standard Material required for 3,400 units $*5.8= 19720$ounces.

Standard Price for 19720 ounces* 3= $ 59160

Then the Material Quantity Variance is= (Standard Price * Actual Quantity)-(Standard Price * Standard Quantity)

After that Material Quantity Variance is= 3*20,800 - (3* 19720)

Now the Material Quantity Variance is = $62400- $ 59160= $ 3240 Unfavorable

Although It is unfavorable because the particular quantity used is quite the quality usage.

Thus, The materials quantity variance for June is $3240 Unfavorable

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