Question

TB MC Qu. 10-150 Majer Corporation makes a product with.. 

Majer Corporation makes a product with the following standard costs: 

	Standard Quantity or Hours	Standard Price or  Rate	Standard Cost Per Unit
Direct materials	6.7 ounces	$2.00 per ounce	$13.40
Direct labor	0.5 hours	$14.00 per hour	$7.00
Variable overhead	0.5 hours	$2.00 per hour	$1.00

The company reported the following results concerning this product in February 

Originally budgeted output	5,300 units
Actual output	4,900 units
Raw materials used in production	30,400 ounces
Actual direct labor-hours	7,920 hours
Purchases of raw materials	32,800 ounces
Actual price of raw materials	$52.90 per ounce
Actual direct labor rate	$62.40 per hour
Actual variable overhead rate	$4.40 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 variable overhead efficiency variance for February is:

Answer 1

Answer:- The materials quantity variance for February is = $4860 F.

Explanation-

Material Quantity variance = (Standard Quantity- Actual Quantity)*Standard price

=(32830 ounces – 30400 ounces)*$2.00 per ounce

= $4860 Favorable

Where:-

Standard Quantity = No. of yards per unit*Actual output

= 6.7 ounces per unit *4900 units

= 32830 ounces