Epley Corporation Makes a Product with the Following Standard Costs

Multiple Choice

Epley Corporation makes a product with the following standard costs:

In July the company produced 3,300 units using 12,240 pounds of the direct material and 2,760 direct labor-hours. During the month, the company purchased 13,000 pounds of the direct material at a cost of $35,100. The actual direct labor cost was $51,612 and the actual variable overhead cost was $20,148.

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 July is:

A) $2,070 F
B) $2,070 U
C) $1,863 F
D) $1,863 U