Milar Corporation makes a product with the following standard costs: Direct materials Direct labor Variable overhead...

 

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Milar Corporation makes a product with the following standard costs: Direct materials Direct labor Variable overhead Standard Quantity or Hours 5.5 pounds Standard Price or Rate $5.00 per pound 0.8 hours 0.8 hours $ 23.00 per hour $10.50 per hour In January the company produced 3,340 units using 13,360 pounds of the direct material and 2,792 direct labor-hours. During the month, the company purchased 16,900 pounds of the direct material at a cost of $14,120. The actual direct labor cost was $63,813 and the actual variable overhead cost was $28,084. The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. Milar Corporation makes a product with the following standard costs: Direct materials Direct labor Variable overhead Standard Quantity or Hours 5.5 pounds Standard Price or Rate $5.00 per pound 0.8 hours 0.8 hours $ 23.00 per hour $10.50 per hour In January the company produced 3,340 units using 13,360 pounds of the direct material and 2,792 direct labor-hours. During the month, the company purchased 16,900 pounds of the direct material at a cost of $14,120. The actual direct labor cost was $63,813 and the actual variable overhead cost was $28,084. The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.

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To calculate the direct materials purchases variance we need to compare the actual cost of direct ma... View the full answer