Question

# Use this information for Stringer Company to answer the question that follow. The following data are...

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

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.)

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