Question

16. Georgia, Inc. has collected the following data on one of its products. The direct materials price variance is:

Direct materials standard (3 lbs @ $1/lb)	$3	per finished unit
Total direct materials cost variance—unfavorable	$26,250
Actual direct materials used	140,000	lbs.
Actual finished units produced	35,000	units

Multiple Choice

• $8,750 favorable.

• $8,750 unfavorable.

• $30,750 favorable.

• $35,000 unfavorable.

  Incorrect

• $26,250 unfavorable.

19, Georgia, Inc. has collected the following data on one of its products. The direct materials quantity variance is:

Direct materials standard (3 lbs @ $1/lb)	$3	per finished unit
Total direct materials cost variance—unfavorable	$24,750
Actual direct materials used	120,000	lbs.
Actual finished units produced	30,000	units

Multiple Choice

• $24,750 unfavorable.

• $30,000 favorable.

• $30,000 unfavorable.

• $5,250 favorable.

• $24,750 favorable.

20. The following company information is available for March. The direct materials price variance is:

Direct materials purchased and used	3,600 feet @ $80 per foot
Standard costs for direct materials for March production	3,700 feet @ $78 per foot

Multiple Choice

• $7,200 unfavorable.

• $7,200 favorable.

• $7,400 unfavorable.

• $7,400 favorable.

• $600 favorable.

21. Fletcher Company collected the following data regarding production of one of its products. Compute the total direct labor cost variance.

Direct labor standard (2 hrs. @ $12.75/hr.)	$	25.50		per finished unit
Actual direct labor hours		62,500		hrs.
Actual finished units produced		31,000		units
Actual cost of direct labor	$	870,300

Multiple Choice

• $6,375 favorable.

• $73,425 unfavorable.

• $73,425 favorable.

• $79,800 favorable.

• $79,800 unfavorable.

Answer 1

Answer 16

Standard cost for material- Actual cost = DM cost varinace

( 35000 * 3 ) - ( 140000 * AP ) = - 26250

105000 - 140000 AP = - 26250

140000 AP = 131250

AP = $ 0.9375

DMPV = ( SP - AP ) * AQ purchased

( 1 - 0.9375) * 140000 = $ 8750 ( fav. )

Option A is correct.

Answer 19

DMQV = ( SQ allowed - AQ ) * SP

[ ( 30000 * 3 ) - 120000 ] * 1

$ 30000 ( unfav. )

Option C is correct.

Answer 20

DMPV = ( SP - AP ) * AQ purchased

( 78 - 80 ) * 3600 = $ 7200 ( Unfav. )

Option A is correct.

Answer 21

DLCV = Standard cost for labour- Actual cost

( 31000 * 25.5 ) - 870300

$ 79800 ( unfav. )

Option E is correct.