Reference no: EM132710014

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 Rate
Direct materials                                             3.0 pounds                     £0.75 per pound
Direct labour                                                  0.4 hours                       £12.00 per hour
Variable 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:

1. 8,600 pounds of sand were purchased at a cost of £7,310.
2. 7,200 pounds of sand were used for core tests.
3. 840 actual direct labour hours were worked at a cost of £8,610.
4. Actual variable manufacturing overhead incurred was £3,200.

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.