Sande Corporation Makes a Product with the Following Standard Costs

question 84

Multiple Choice

Sande Corporation makes a product with the following standard costs: In November the company's budgeted production was 2,900 units but the actual production was 3,000 units. The company used 27,670 grams of the direct material and 1,390 direct labor-hours to produce this output. During the month, the company purchased 31,700 grams of the direct material at a cost of $196,540. The actual direct labor cost was $29,607 and the actual variable overhead cost was $2,502.

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 price variance for November is:

• A)$5,520 F
• B)$6,340 F
• C)$5,520 U
• D)$6,340 U

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Definitions:

Repetitive Process

A product-oriented production process that uses modules.

Assembly Line

A production process that breaks down the manufacture of a good into steps that are completed in a pre-defined sequence, enhancing efficiency through specialization and mechanization.