1. The following standards have been established for a raw material used to make product O84:

Standard quantity of the material per unit of output		9.0	meters
Standard price of the material	$	19.80	per meter

The following data pertain to a recent month's operations:

Actual material purchased		5,300	meters
Actual cost of material purchased	$	107,060
Actual material used in production		5,200	meters
Actual output		690	units of product O84

The direct materials purchases variance is computed when the materials are purchased.

Required:

a. What is the materials price variance for the month?

b. What is the materials quantity variance for the month?

2. Handerson Corporation makes a product with the following standard costs:

	Standard Quantity or Hours			Standard Price or Rate
Direct materials		10.2	kilos	$	7.70	per kilo
Direct labor		0.3	hours	$	37.00	per hour
Variable overhead		0.3	hours	$	7.70	per hour

The company reported the following results concerning this product in August.

Actual output		4,900	units
Raw materials used in production		30,730	kilos
Purchases of raw materials		33,300	kilos
Actual direct labor-hours		1,100	hours
Actual cost of raw materials purchases	$	212,920
Actual direct labor cost	$	24,436
Actual variable overhead cost	$	9,240

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 variable overhead rate variance for August is:

Multiple Choice

• $1,029 F
• $770 F
• $770 U
• $1,029 U

  I will make sure to rate this well if it answered completely.