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In January the company produced 2,000 units using 16,060 pounds of the direct material and 210 direct labor-hours. During the month, the company purchased 16,900 pounds of the direct material at a cost of $65,910. The actual direct labor cost was $4,473 and the actual variable overhead cost was $756.
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 quantity variance for January is:
Multiple Choice
$2,640 U
$2,574 F
$2,640 F
$2,574 U

Answer :

Tutorconsortium423

Therefore , Direct material price variation = a positive $1,690

What is variance ?

The variance of a random variable from its population mean or sample mean is expected in probability theory and statistics. The term "variance" refers to a measurement of how widely apart a group of numbers are from one another.

Here,

giving the information below:

materials directly seven pounds At $4 per pound

In the course of the month, the business spent $65,910 for 16,900 pounds of the direct material.

The following formula must be used to determine the direct material price variance:

Direct material price variance is equal to the product of the standard price and the actual price.

real cost = 65,910/16,900 = $3.9

Variance in the price of the direct material = (4 - 3.9)*16,900

Direct material price variation = a positive $1,690

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