The following data are given for Stringer Company:Budgeted production914 unitsActual production  1,010 unitsMaterials:     Standard price per ounce$1.8    Standard ounces per completed unit12    Actual ounces purchased and used in production12,484    Actual price paid for materials$25,592Labor:     Standard hourly labor rate$14.81 per hour    Standard hours allowed per completed unit4.5    Actual labor hours worked5,201.5    Actual total labor costs$79,323Overhead:     Actual and budgeted fixed overhead$1,118,000    Standard variable overhead rate$27.00 per standard labor hour    Actual variable overhead costs$145,642 Overhead is applied on standard labor hours.The direct materials quantity variance isa.3,120.80 favorableb.3,120.80 unfavorablec.655.20 unfavorabled.655.20 favorable

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Asked Dec 16, 2019
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The following data are given for Stringer Company:

Budgeted production 914 units
Actual production   1,010 units
Materials:  
    Standard price per ounce $1.8
    Standard ounces per completed unit 12
    Actual ounces purchased and used in production 12,484
    Actual price paid for materials $25,592
Labor:  
    Standard hourly labor rate $14.81 per hour
    Standard hours allowed per completed unit 4.5
    Actual labor hours worked 5,201.5
    Actual total labor costs $79,323
Overhead:  
    Actual and budgeted fixed overhead $1,118,000
    Standard variable overhead rate $27.00 per standard labor hour
    Actual variable overhead costs $145,642
 
Overhead is applied on standard labor hours.

The direct materials quantity variance is

a.3,120.80 favorable
b.3,120.80 unfavorable
c.655.20 unfavorable
d.655.20 favorable
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Expert Answer

Step 1

Determine standard quantity.

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Standard quantity = Actual production x Standard ounces per completed unit Standard quantity = 1,010 units x 12 ounces Standard quantity = 12,120 ounces

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Step 2

Determine direct materials...

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Direct materials quantity variance = (Standard quantity - Actual quantity) x Standard price Direct materials quantity variance = (12,120 ounces - 12,484 ounces) x $1.8 Direct materials quantity variance = -364 ounces x $1.8 Direct materials quantity variance = 655.20 Unfavorable

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