Question

Use this information for Stringer Company to answer the question that follow.

The following data are given for Stringer Company:

Budgeted production	959 units
Actual production	1,063 units
Materials:
Standard price per ounce	$1.9
Standard ounces per completed unit	10
Actual ounces purchased and used in production	10,949
Actual price paid for materials	$22,445
Labor:
Standard hourly labor rate	$14.96 per hour
Standard hours allowed per completed unit	4.6
Actual labor hours worked	5,474.45
Actual total labor costs	$83,485
Overhead:
Actual and budgeted fixed overhead	$1,186,000
Standard variable overhead rate	$27.00 per standard labor hour
Actual variable overhead costs	$153,285
Overhead is applied on standard labor hours.

The direct materials quantity variance is

a.$1,641.90 favorable

b.$1,641.90 unfavorable

c.$606.10 unfavorable

d.$606.10 favorable

Answer 1

Correct answer is Option C = $ 606.10 (unfavourable.)

Calculation :

Direct material quantity variance = Standard price per unit * ( Actual quantity of direct material used - Budgeted Quantity of direct material used )

= SP * ( AQ - SQ )

=$ 1.9 * ( 10,949 ounces - 10,630 ounces )

= $ 1.9 * - 319 ounces

= - $ 606.10

Since variance is negetive , its unfavourable.

working notes :

Standard quantity of material used = Std quanity per unit * actual unit produced

= 10 ounce * 1063 units

= 10630 ounces

( dear student, please upvote , if it hepls. thankyou.)