Question

The following data are given for Stringer Company:

Budgeted production	959 units
Actual production	1,063 units
Materials:
Standard price per ounce	$1.9
Standard ounces per completed unit	10
Actual ounces purchased and used in production	10,949
Actual price paid for materials	$22,445
Labor:
Standard hourly labor rate	$14.96 per hour
Standard hours allowed per completed unit	4.6
Actual labor hours worked	5,474.45
Actual total labor costs	$83,485
Overhead:
Actual and budgeted fixed overhead	$1,186,000
Standard variable overhead rate	$27.00 per standard labor hour
Actual variable overhead costs	$153,285
Overhead is applied on standard labor hours.

The direct materials quantity variance is

a.$1,641.90 favorable

b.$1,641.90 unfavorable

c.$606.10 unfavorable

d.$606.10 favorable

Answer 1

Answer : c. $606.10 unfavorable

Calculation:

Direct Material quantity variance = (Standard Quantify * Standard rate) - (Actual Quantity * Standard rate)

Standard quantity = 1,063 units * 10 ounces = 10,630 ounces

Standard rate = $1.9 per ounce

Actual Quantity = 10,949 ounces

Direct Material quantity variance = (10,630 ounces * $1.9) - (10,949 * $1.9)                                                           = $20,197 - $20,803.1                                                            = $606.1 unfavorable

All the best...