Oxford Co. has a materials standard of 2.1 pounds per unit of output. Each pound has a standard price of $12 per pound. During February, Oxford Co. paid $57,500 for 4,870 pounds, which were used to produce 2,420 units. What is the direct materials quantity variance? Multiple Choice $9,760 unfavorable $1,300 unfavorable $9,000 favorable $2,544 favorable
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.
Oxford Co. has a materials standard of 2.1 pounds per unit of output. Each pound has a standard price of $12 per pound. During February, Oxford Co. paid $57,500 for 4,870 pounds, which were used to produce 2,420 units. What is the direct materials quantity variance?
Multiple Choice
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$9,760 unfavorable
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$1,300 unfavorable
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$9,000 favorable
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$2,544 favorable
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