Asked by
Jamisha Youtube
on Dec 17, 2024
Verified
Solly Corporation produces a product for national distribution. Standards for the product are:Materials: 12 ounces per unit at 60¢ per ounce.Labor: 2 hours per unit at $8 per hour.During the month of December, the company produced 1,000 units. Information for the month follows:Materials: 14,000 ounces purchased and used at a total cost of $7,700.Labor: 2,500 hours worked at a total cost of $20,625.The materials price variance is:
A) $700 Unfavorable
B) $600 Favorable
C) $600 Unfavorable
D) $700 Favorable
Materials Price Variance
The difference between the actual cost of materials and the standard cost, multiplied by the quantity purchased.
Ounces
A unit of weight commonly used in the United States and the United Kingdom, equal to one-sixteenth of a pound.
Labor
The human effort, both physical and intellectual, used in the creation of goods and services.
- Become adept in the rationale and quantitative assessment of direct materials variances, with emphasis on materials price and quantity variances.
Verified Answer
AM
Learning Objectives
- Become adept in the rationale and quantitative assessment of direct materials variances, with emphasis on materials price and quantity variances.