Flexer Company Ltd has set thefollowing standards for the productionof one unit of product. Normalproduction each month is 500 units.Direct Material 8 lbs at $6.50 per lb $52Direct Labour 4 hours at $7.00 per hour$28During June, actual productionamounted to 420 units. All directmaterial was purchased and used thismonth. The actual cost amounted to:Direct Material 3,500 lbs $21,875Direct labor: 1,720 hours 12,2121) the direct material quantity variancefor June production is calculated to be:a. $35 Ub. $875 Uc. $910 Ud. $875 FE. $3,250 F

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Description: Flexer Company Ltd has set thefollowing standards for the productionof one unit of product. Normalproduction each month is 500 units.Direct Material 8 lbs at $6.50 per lb $52Direct Labour 4 hours at $7.00 per hour$28During June, actual productionamo

Material Quantity variance is always calculated on the difference between standard and the actual…

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Flexer Company Ltd has set the following standards for the production of one unit of product. Normal production each month is 500 units. Direct Material 8 lbs at $6.50 per lb $52 Direct Labour 4 hours at $7.00 per hour $28 During June, actual production

Flexer Company Ltd has set the following standards for the production of one unit of product. Normal production each month is 500 units. Direct Material 8 lbs at $6.50 per lb $52 Direct Labour 4 hours at $7.00 per hour $28 During June, actual production

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Concept explainers

Variance Analysis

In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.

Standard Costing

The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.

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Question

Flexer Company Ltd has set the
following standards for the production
of one unit of product. Normal
production each month is 500 units.
Direct Material 8 lbs at $6.50 per lb $52
Direct Labour 4 hours at $7.00 per hour
$28
During June, actual production
amounted to 420 units. All direct
material was purchased and used this
month. The actual cost amounted to:
Direct Material 3,500 lbs $21,875
Direct labor: 1,720 hours 12,212
1) the direct material quantity variance
for June production is calculated to be:
a. $35 U
b. $875 U
c. $910 U
d. $875 F
E. $3,250 F

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