A Jensen Beach material line planned 620 units but used 690 units at $12 each. What cost variance should be logged?
Correct Answer
B) $840
Material cost variance equals quantity variance multiplied by unit cost.
Why This Is the Correct Answer
Material cost variance equals quantity variance multiplied by unit cost.
Why the Other Options Are Wrong
Option A: $8,280
$8,280 is above the supported result for material usage variance; it likely double-counts allowance, uses the wrong unit, or rounds too early.
Option C: $7,440
$7,440 is above the supported result for material usage variance; it likely double-counts allowance, uses the wrong unit, or rounds too early.
Option D: $70
$70 is below the supported result for material usage variance; it likely omits allowance, conversion, coverage, or final round-up.
Memory Technique
Cost Clerk takeoff: count the condition before counting the package.
Reference Hint
Open-book path: tab Builder's Guide to Accounting, 2001 to Builder's Guide to Accounting, Material cost variance and job cost records; verify the trade cost, production, or field-control rule before answering.
More Business & Finance Questions
The Cedar Key subcontract closeout file requires 44 final releases, and 31 have been received. How many releases are missing?
A Florida GC prepaid $18,000 for annual insurance and expenses it evenly by month. After 7 months have expired, what prepaid asset remains?
The West Miami system access list starts with 22 active users, adds 4, and removes 7. How many active users should remain?
The Winter Park bank review shows a bank balance of $124,600, book balance of $119,400, and known timing items of $3,200. What unexplained difference remains?
The Riverview bank review shows a bank balance of $87,500, book balance of $90,400, and known timing items of $1,600. What unexplained difference remains?
A Satellite Beach contractor had 4 separations during the quarter and an average headcount of 32. What turnover rate should HR report?
A Winter Park startup budgets monthly overhead of $61,500 and wants a 4-month operating reserve. What reserve should be funded?
A Royal Palm Beach customer account has unpaid approved invoices of $126,000. Company policy requires review when unpaid invoices exceed $100,000. What status applies?
A Wildwood contractor had 9 separations during the quarter and an average headcount of 60. What turnover rate should HR report?
A Clermont field group had 64 absence hours out of 1280 scheduled hours. What absence rate should be reported?
People Also Study
Related Study Resources
Previous Question
The Oldsmar retainage receivable begins at $58,400. Current billing is $426,500 with 5% retainage, and $15,000 retainage is released. What ending retainage receivable remains?
Next Question
A North Port job ordered 410 fixtures and received 385. What delivery shortage should the superintendent report?