Question

Atkins, Inc. produces a product requiring 8 pounds of material at $1.50 per pound. Atkins produced 10,000 units of this product during 2019 resulting in a $30,000 unfavorable materials quantity variance. How many pounds of direct material did Atkins use during 2019?

Answer 1

100,000 pounds

Explanation:

The expected value (E) spent on direct materials used by Atkins,Inc for 2019 is:

`E=\$1.50*8*10,000\\E= \$120,000`

Since there was an unfavorable $30,000 variance in materials quantity, the actual value spent (Av) on direct materials is:

`A_(v)= \$120,000 +\$30,000\\A_(v)= \$150,000`

The amount of direct material (M), in pounds, used during 2019 is:

`M=(\$150,000)/(\$1.50) \\M=100,000 \ pounds`