Question

Scarlett Company has a direct material standard of 3 gallons of input at a cost of $13 per gallon. During July, Scarlett Company purchased and used 7,540 gallons. The direct material quantity variance was $1,170 unfavorable and the direct material price variance was $3.770 favorable. What price per gallon was paid for the purchases? 1 Multiple Choice 0 $13.40 O $10.40 $12.50 0 0 $13.00

Answer 1

1) Material price variance = (Standard price-actual price)Standard qty

3770 = (13*7540-X)

X = 98020-3770

X(Actual Cost) = 94250

Actual Cost per gallon = 94250/7540 = 12.50

So answer is c) $12.50

2) Applied overhead = 4800*10*3.5 = 168000

Actual overhead = 157600

Over applied overhead = 168000-157600 = 10400

So answer is d) $10400 over applied

3) Labor efficiency variance = (4740*2-8890)*29.50 = 17405 F

So answer is b) $17405 F