6) Oxford Company has a materials standard of 2.1 pounds per unit of output. Each pound has a
standard price of $12 per pound. During February, Oxford Company paid $73,970 for 5,690
pounds at $13 per pound, which were used to produce 3,250 units of product. What is the
direct materials price variance?
A) $5,690 unfavorable
B) $4,100 favorable
C) $3,250 unfavorable
D) $6,540 favorable
Whitman Incorporated has a direct labor standard of 2 hours per unit of output and a standard
wage rate of $22.50 per hour. During July, Whitman paid $94,572 to employees for 4,440
hours worked, and 2,350 units were produced during that time. What is the direct labor rate
variance?
A) $2,820 unfavorable
B) $5,328 favorable
C) $5,640 favorable
D) $5,328 unfavorable
Rate of labor = 21.3
(22.50-21.3) * 4,440
= 5,328
Meadow Company produces hand tools. A sales budget for the next four months is as
follows: March 10,000 units, April 13,000 units, May 16,000 units, and June 21,000 units.
Meadow Company's ending finished goods inventory policy is 10% of the following month's
sales. March 1 beginning inventory is projected to be 1,400 units. How many units will be
produced in April?
A) 13,000
B) 13,300
C) 15,900
D) 12,700
Who would typically be responsible for the direct materials quantity variance?
A) The purchasing manager
B) The human resources manager
C) The chief financial officer
D) The production manager
