Milar Corporation makes a product with the following standard costs: Standard Quantity or Hours Direct materials Direct labor Variable overhead. Standard Price or Rate 2.0 pounds 1.6 1.6 hours hours. $ 7.00 $14.00 $ 2.00 per pound per hour per hour In January the company produced 4,600 units using 10,220 pounds of the direct material and 2,200 direct labor-hours. During the month, the company purchased 10,790 pounds of the direct material at a cost of $76,670. The actual direct labor cost was $38,246 and the actual variable overhead cost was $11,947. 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 January is: Multiple Choice $1,000 U $1,140 F $1,140 U $1,000 F

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Chapter1: Financial Statements And Business Decisions
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Milar Corporation makes a product with the following standard costs:
Standard
Quantity
or
Hours
Direct materials
Direct labor
Variable overhead
Standard
Price or
Rate
2.0 pounds
1.6
1.6
hours
hours.
$ 7.00
$14.00
$ 2.00
per pound
per hour
per hour
In January the company produced 4,600 units using 10,220 pounds of the direct material and 2,200 direct labor-hours. During the month,
the company purchased 10,790 pounds of the direct material at a cost of $76,670. The actual direct labor cost was $38,246 and the actual
variable overhead cost was $11,947.
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 January is:
Multiple Choice
$1,000 U
$1,140 F
$1,140 U
$1,000 F
Transcribed Image Text:Milar Corporation makes a product with the following standard costs: Standard Quantity or Hours Direct materials Direct labor Variable overhead Standard Price or Rate 2.0 pounds 1.6 1.6 hours hours. $ 7.00 $14.00 $ 2.00 per pound per hour per hour In January the company produced 4,600 units using 10,220 pounds of the direct material and 2,200 direct labor-hours. During the month, the company purchased 10,790 pounds of the direct material at a cost of $76,670. The actual direct labor cost was $38,246 and the actual variable overhead cost was $11,947. 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 January is: Multiple Choice $1,000 U $1,140 F $1,140 U $1,000 F
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