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 The Litton Company has established standards as follows: \text { The Litton Company has established standards as follows: }

question 215

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 The Litton Company has established standards as follows: \text { The Litton Company has established standards as follows: }
 Direct Material 3kgs@@4/kg.=$12 per unit  Direct Labour 2hrs@$8/hr.=$16 per unit  Variable Manufacturing Overhead 2 hrs. @ $5/hr.=$10 per unit \begin{array}{|l|r|}\hline \text { Direct Material } & 3 \mathrm{kgs} @ @ 4 / \mathrm{kg} .=\$ 12 \text { per unit } \\\hline \text { Direct Labour } & 2 \mathrm{hrs} @ \$ 8 / \mathrm{hr} .=\$ 16 \text { per unit } \\\hline \text { Variable Manufacturing Overhead } & 2 \text { hrs. @ } \$ 5 / \mathrm{hr} .=\$ 10 \text { per unit } \\\hline\end{array}
Actual production figures for the past year are given below. The company records the materials price variance when materials are purchased.
 Units Produced 600 Direct Material Used 2,000kgs. Direct Material Purcahsed (3,000 kgs.)  $11,400 Direct Labour Cost (1,100 hrs. ) $9,240 Variable Manufacturing Overhead Cost Incurred $5,720\begin{array}{|l|r|}\hline \text { Units Produced } & 600 \\\hline \text { Direct Material Used } & 2,000 \mathrm{kgs} . \\\hline \text { Direct Material Purcahsed (3,000 kgs.) } & \$ 11,400 \\\hline \text { Direct Labour Cost }(1,100 \text { hrs. }) & \$ 9,240 \\\hline \text { Variable Manufacturing Overhead Cost Incurred } & \$ 5,720 \\\hline\end{array}
The company applies variable manufacturing overhead to products on the basis of direct labour hours.
-What was the materials price variance?

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Definitions:

Stream Of Consciousness

A narrative mode or literary technique that seeks to depict the multitudinous thoughts and feelings passing through the mind.

Continually Changing

Undergoing constant transformation or evolution, never remaining static.

External Stimuli

Events or occurrences outside of an organism that influence its behavior or physiological responses.

Internal Sensations

Feelings or experiences that originate within the body, such as hunger, thirst, or pain.

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