The Collins Corporation uses standard costing and has established the following direct material and direct labor standards for each unit of the single product it makes: Direct materials 4 gallons at $8 per gallon Direct labor 1 hour at $16 per hour During July, the company made 6,000 units of product and incurred the following costs: Direct materials purchased 26,800 gallons at $8.20 per gallon Direct materials used Direct labor used 25,200 gallons 5,600 hours at $15.30 per hour The direct materials purchases variance is computed when the materials are purchased. Required: The materials price variance for July was: A. $5,360 Favorable. B. $5,360 Unfavorable. C. $5,040 Favorable. D. $5,040 Unfavorable.
The Collins Corporation uses standard costing and has established the following direct material and direct labor standards for each unit of the single product it makes: Direct materials 4 gallons at $8 per gallon Direct labor 1 hour at $16 per hour During July, the company made 6,000 units of product and incurred the following costs: Direct materials purchased 26,800 gallons at $8.20 per gallon Direct materials used Direct labor used 25,200 gallons 5,600 hours at $15.30 per hour The direct materials purchases variance is computed when the materials are purchased. Required: The materials price variance for July was: A. $5,360 Favorable. B. $5,360 Unfavorable. C. $5,040 Favorable. D. $5,040 Unfavorable.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter9: Standard Costing: A Functional-based Control Approach
Section: Chapter Questions
Problem 30P: Algers Company produces dry fertilizer. At the beginning of the year, Algers had the following...
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