Question

Lindros Corporation makes hockey pucks, Following are the standard costs for producing the hockey pucks:

Inputs	Standard Quantity or Hours	Standard Price or Rate
Direct materials	2.0 kilos	$7.00 per kilo
Direct labor	1.2 hours	$12.00 per hour
Variable overhead	1.2 hours	$2.00 per hour

In April Lindros produced 4,900 hockey pucks using 10,300 kilos of the direct material and 2,280 direct labor-hours. During April, the company purchased 10,870 kilos of the direct material at a cost of $76,750. The actual direct labor cost was $38,240 and the actual variable overhead cost was $11,941.

Lindros applies variable overhead on the basis of direct labor-hours. The direct materials price variance is computed when the materials are purchased.

The materials quantity variance for April is:

Multiple Choice

$3,500 U

$3,530 F

$3,500 F

$3,530 U

Answer 1

Solution:

Material Quantity Variance

Direct Material Quantity/Efficiency Variance
Standard Quantity Allowed for actual production:
Actual Production/Activity	4900	Hockey
x Allowed Standard Quantity Per Unit	2	Kilos
Total Standard Quantity Allowed for actual production (SQAP)	9,800	Kilos
Actual Quantity USED (AQU)	10,300	Kilos
Variance or Difference in Quantity	500	Kilos
x Standard Price (SP)	$7.00	Per Kilo
Material Quantity/Efficiency Variance	$3,500	Unfavorable

Hence, the correct option is $3,500 U

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