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Cox Engineering performs cement core tests in its laboratory. The following standards have been set for each core test performed: Standard Hours or Quantity Standard Price or RateDirect materials 3.0 pounds £0.75 per poundDirect labour 0.4 hours £12.00 per hourVariable manufacturing overhead 0.4 hours £9.00 per hour
During March, the laboratory performed 2,000 core tests. On March 1 no direct materials (sand) were on hand. Variable manufacturing overhead is assigned to core tests on the basis of direct labour hours. The following events occurred during March:
Problem 1: The materials quantity variance for March is:
Multiple Choice
Option 1: £1,950 unfavourable.
Option 2: £ 900 unfavourable.
Option 3: £900 favourable.
Option 4: £1,950 favourable.
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