A company provided the following direct materials cost information. Compute the direct materials quantity variance. Standard costs assigned: Direct materials standard cost (405,000 units @ $4.00/unit)$1,620,000 Actual costs: Direct materials costs incurred (403,120 units @ $4.30/unit)$1,733,416 Multiple Choice$113,416 Favorable.$8,084 Unfavorable$8,084 Favorable.$7,520 Favorable.$7,520 Unfavorable.

Variance: Variance refers to the difference level in the actual cost incurred and standard cost. The…

Answered: A company provided the following direct…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A company provided the following direct materials cost information. Compute the direct materials quantity variance.


Standard costs assigned:
Direct materials standard cost (405,000 units @ $4.00/unit)	$	1,620,000
Actual costs:
Direct materials costs incurred (403,120 units @ $4.30/unit)	$	1,733,416

Multiple Choice

$113,416 Favorable.
$8,084 Unfavorable
$8,084 Favorable.
$7,520 Favorable.
$7,520 Unfavorable.

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

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