14.The direct material usage variance for March is:a. $5,000 unfavorableb. $1,250 unfavorablec. $3,750 unfavorabled. $3,667.50 unfavorablee. $5,000 favorablef. $1,250 favorableg. $3,750 favorableh. None of these answers are correct. Lemon Company manufactures a single product. The company manufactured 5,000units in March, using 6,150 pounds of material and 2,420 labor hours. During the samemonth, they purchased 6,200 pounds of material for $151,590. The actual labor costfor March was $39,930. There were no beginning or ending work-in-processinventories. The company has the following unit standard costs for direct materialsand labor.BudgetedquantityPer unitDirect materials 1.20 poundsBudgeted price$25 per pound$15 per hourDirect labor0.50 hours

Standard cost means the cost which the company is expecting to be incurred on the basis of estimate made earlier. This standard is set and then compare with actual cost and remedial actions are taken. Direct material cost has been further divided in price and quantity variance. CALCULATION OF DIRECT MATERIAL USAGE VARIANCE FOR LEMON COMPANY Standard quantity (5000*1.20) = 6,000 units Actual quantity = 6,150 units Budgeted price = $ 25 per pound Direct material usage variance = (Standard quantity – Actual quantity)*Budgeted price Direct material usage variance = (6000-6150)*25 Direct material usage variance = $ 3,750 UNFAVOURABLE Hence, the right answer is OPTION C , $ 3,750 UNFAVOURABLE.

Business

Accounting

- The direct material usage variance for March is: a. $5,000 unfavorable b. $1,250 unfavorable c. $3,750 unfavorable d. $3,667.50 unfavorable e. $5,000 favorable f. $1,250 favorable 14. g. $3,750 favorable h. None of these answers are correct.

- The direct material usage variance for March is: a. $5,000 unfavorable b. $1,250 unfavorable c. $3,750 unfavorable d. $3,667.50 unfavorable e. $5,000 favorable f. $1,250 favorable 14. g. $3,750 favorable h. None of these answers are correct.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question Content Area Myers Corporation has the following data related to direct materials costs for November: actual cost for 4, 690 pounds of material at $5.30 and standard cost for 4, 410 pounds of material at $6.30 per pound. The direct materials price variance is a. $1,764 favorable b. $4,690 favorable c. $1,764 unfavorable d. $4,690 unfavorable
The materials quantity variance for April is: Multiple Choice $2,340 U $2,430 F $2,340 F $2,430 U
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Aaha Inc. produces premium protective automotive covers. The direct materials and direct labour standards for one car cover are as follows: Standard Quantity or Hours Direct materials Direct labour 7.00 metres of cloth 0.30 hours Standard Price or Rate $8 per metre $ 16 per hour Standard Cost $56.00 $4.80 In September, the following activity was recorded: 17,500 metres of cloth were purchased at a cost of $7.50 per metre All of the purchased material was used to produce 2,500 car covers. 520 direct labour-hours were recorded at a total labour cost of $8,320. Required: 1. Compute all direct materials variances for September (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (ie., zero variance).) Answer is complete and correct. Direct materials price variance Direct materials quantity variance Total direct material cost variance $ 8,750 F $ $ 8,750 ( 0 None F 000