Question

The following materials standards have been established for a particular product: Standard quantity per unit of output 4.7 pounds Standard price $ 13.50 per pound The following data pertain to operations concerning the product for the last month: Actual materials purchased 5,250 pounds Actual cost of materials purchased $ 63,180 Actual materials used in production 4,750 pounds Actual output 730 units The direct materials purchases variance is computed when the materials are purchased. What is the materials quantity variance for the month

Answer 1

Material variance= $17806,5

Step-by-step explanation:

The direct material variance is the difference between the standard cost of materials resulting from production activities and the actual costs incurred. The direct material variance is comprised of two other variances, which are:

- Purchase price variance

- Material yield variance

Material yield variance: This is concerned solely with the number of units of the materials used in the production process. The calculation is:

(Actual unit usage - Standard unit usage) x Standard cost per unit

In this exercise:

Standard cost per unit= 13,50

Standard unit usage=4,7punds*730units=3431

Actual unit usage=4750

Material variance= (4750-3431)*13,50=$17806,5