Eliezrie Corporation Makes a Product with the Following Standard Costs

question 324

Multiple Choice

Eliezrie Corporation makes a product with the following standard costs: In January the company's budgeted production was 7,400 units but the actual production was 7,500 units. The company used 45,580 kilos of the direct material and 2,030 direct labor-hours to produce this output. During the month, the company purchased 48,500 kilos of the direct material at a cost of $53,350. The actual direct labor cost was $18,473 and the actual variable overhead cost was $7,714. 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:

• A)$3,487 F
• B)$3,170 U
• C)$3,170 F
• D)$3,487 U

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Definitions:

Predetermined Point

A specific goal, outcome, or condition that is decided in advance before any action is taken.

Balanced Scorecards

A strategic planning and management system used by organizations to align business activities with the vision and strategy of the organization, improve internal and external communications, and monitor organizational performance against strategic goals.

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