The Collins Corporation Uses Standard Costing and Has Established the Following

Multiple Choice

The Collins Corporation uses standard costing and has established the following direct material and direct labor standards for each unit of the single product it makes:

• Direct materials: 4 gallons at $8 per gallon
• Direct labor: 1 hour at $16 per hour

During July, the company made 6,000 units of product and incurred the following costs:

• Direct materials purchased: 26,800 gallons at $8.20 per gallon
• Direct materials used: 25,200 gallons
• Direct labor used: 5,600 hours at $15.30 per hour

The direct materials purchases variance is computed when the materials are purchased.

-The materials quantity variance for July was:

A) $22,960 Unfavorable
B) $22,400 Unfavorable
C) $9,600 Unfavorable
D) $9,840 Unfavorable