Question

Milar Corporation makes a product with the following standard costs: Direct materials Direct labor Variable overhead Standard Quantity or Hours 2.0 pounds 8.6 hours 2.6 hours Standard Price or Rate $ 7.00 per pound $14.ee per hour $ 6.00 per hour In January the company produced 4.600 units using 10,120 pounds of the direct material and 2100 direct labor-hours. During the month, the company purchased 10,690 pounds of the direct material at a cost of $76,570. The actual direct labor cost was $38.256 and the actual variable overhead cost was $11957 The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased The materials price variance for January is Maple Choice o $1600 W O $1740F

Answer 1

Correct answer----------$1740U

Working

Material Price Variance
(	Standard Rate	-	Actual Rate	)	x	Actual Quantity
(	$                    7.00	-	$                     7.16	)	x	10690
	-1740
	Variance		$             1,740.00			Unfavourable-U

.

		4600	Units
	Quantity (AQ)	Rate (AR)	Actual Cost
Direct Material	10690	$       7.16	$          76,570.00