Amber Manufacturing makes a product with the following standard costs: Direct materials 2.5 liters $6.50 per liter Direct labor 1.5 hours $12.50 per hour Variable overhead 1.5 hours $3.20 per hour The company produced 6, 200 units in May using 15,900 liters of direct material and 3, 400 direct labor hours. During the month, the company purchased 16, 200 liters of direct material at $6.60 per liter. The actual direct labor rate was $12.80 per hour, and the actual variable overhead rate was $3.20 per hour. The company applies variable overhead on the basis of direct labor hours. The direct materials purchase variance is computed when the materials are purchased. What is the materials quantity variance for May?

Amber Manufacturing makes a product with the following standard costs: Direct materials 2.5 liters $6.50 per liter Direct labor 1.5 hours $12.50 per hour Variable overhead 1.5 hours $3.20 per hour The company produced 6, 200 units in May using 15,900 liters of direct material and 3, 400 direct labor hours. During the month, the company purchased 16, 200 liters of direct material at $6.60 per liter. The actual direct labor rate was $12.80 per hour, and the actual variable overhead rate was $3.20 per hour. The company applies variable overhead on the basis of direct labor hours. The direct materials purchase variance is computed when the materials are purchased. What is the materials quantity variance for May?

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter8: Standard Cost Accounting—materials, Labor, And Factory Overhead

Section: Chapter Questions

Problem 10E: Standard unit cost and journal entries The normal capacity of Algonquin Adhesives Inc. is 40,000...

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