Question

turrubiates corporation makes a product that uses a material with the following standards. standard quantity 8.4 liters per unit standard price $2.90 per liter standard cost $24.36 per unit the company budgeted for production of 4,200 units in april, but actual production was 4,300 units. the company used 37,000 liters of direct material to produce this output. the company purchased 20,500 liters of the direct material at $3.0 per liter. the direct materials price variance is computed when the materials are purchased. the materials quantity variance for april is multiple choice $2,552 u $2,640 u $2,552 f $2,640 f

Explanation:

Step1: Calculate standard quantity

Standard quantity per unit = \(8.4\) liters. Actual production = \(4300\) units.
Standard quantity \(=8.4\times4300 = 36120\) liters.

Step2: Calculate materials quantity variance

Materials quantity variance formula: \(=(Actual\ quantity - Standard\ quantity)\times Standard\ price\)
Actual quantity \(=37000\) liters, Standard price \(=\$2.90\) per liter.
\(=(37000 - 36120)\times2.90\)
\(=880\times2.90\)
\(=\$2552\) (Unfavorable as actual quantity > standard quantity)

Answer:

\(\$2552\ U\)