Q1) Standard costs and actual costs for direct labor, direct materials, and factory overhead for manufacture of 2,500 units of product are given below:
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Standard Costs @ 2,500 units:
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Direct materials
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2,500 kilograms @ $8/kg
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Direct labor
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7,500 hours @ $12/hr
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Actual Costs @ 2,500 units:
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Direct materials
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2,600 kilograms @ $8.75
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Direct labor
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7,400 hours @ $11.40
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Direct materials quantity variance is:
i) $800 unfavorable
ii) $875 favorable
iii) $875 unfavorable
iv) $800 favorable
v) $1,875 unfavorable