Assume the following information appears in the standard cost card for a company that makes only one product: Standard Quantity or Hours 5 pounds 2 hours 2 hours Standard Price or Rate $12.10 per pound $17.00 per hour $ 3.00 per hour Standard Cost Direct materials $60.50 Direct labor $34.00 Variable manufacturing overhead $ 6.00 During the most recent period, the following additional information was available: • 20,000 pounds of material was purchased at a cost of $10.50 per pound. • All of the material that was purchased was used to produce 3,900 units. • 8,000 direct labor-hours were recorded at a total cost of $132,000. What is the direct materials spending variance?
Assume the following information appears in the standard cost card for a company that makes only one product: Standard Quantity or Hours 5 pounds 2 hours 2 hours Standard Price or Rate $12.10 per pound $17.00 per hour $ 3.00 per hour Standard Cost Direct materials $60.50 Direct labor $34.00 Variable manufacturing overhead $ 6.00 During the most recent period, the following additional information was available: • 20,000 pounds of material was purchased at a cost of $10.50 per pound. • All of the material that was purchased was used to produce 3,900 units. • 8,000 direct labor-hours were recorded at a total cost of $132,000. What is the direct materials spending variance?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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7
Transcribed Image Text:Assume the following information appears in the standard cost card for a company that makes only one product:
Standard Quantity
or Hours
5 pounds
2 hours
Standard Price
or Rate
$12.10 per pound
$17.00 per hour
$ 3.00 per hour
Standard Cost
Direct materials
$60.50
$34.00
$ 6.00
Direct labor
Variable manufacturing overhead
2 hours
During the most recent period, the following additional information was available:
20,000 pounds of material was purchased at a cost of $10.50 per pound.
• All of the material that was purchased was used to produce 3,900 units.
8,000 direct labor-hours were recorded at a total cost of $132,000.
What is the direct materials spending variance?
Multiple Choice
$6,050 U
$6,050 F
$25,950 U
$25,950 F
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