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Solution

34. Operating Income of 19000 Units = Sales - VC- FC = 19000 * $4 - 19000 * $1.50 - $17000

Operating Income of 19000 Units = $30500 (Option E)

35. Direct Materials Quantity Variance = (SQ - AQ) * SP

Direct Materials Quantity Variance = (35000 * 3 - 140000) * $1

Direct Materials Quantity Variance = $35000 Unfavourable (Option D)

36. Direct Materials Quantity Variance = (SQ - AQ) * SP

Direct Materials Quantity Variance = (50000 * 6 - 303500) * $2

Direct Materials Quantity Variance = $7000 Unfavourable (Option D)

37. Direct Materials Price Variance = (SP - AP) * AQ

Direct Materials Price Variance = ($5 - $5.10) * 5300

Direct Materials Price Variance = $530 Unfavourable (Option A)

38. $9,750 favorable. Option D

Budgeted direct materials (26000 × $3 each) $ 78000
Unfavorable direct materials variance $16250

Actual cost of direct materials used $ 94250
Standard Cost of Direct Materials Used = AQ × SP = (104000 lb. × $1/lb.) 104000

Direct materials price variance $ 9,750 F