Final answer:
The materials quantity variance for the Haden Company is calculated by subtracting the standard quantity of silk expected to be used for 1,000 dresses from the actual quantity used, and then multiplying that difference by the standard cost per square foot. The variance is found to be $3,600 unfavorable, as more material was used than anticipated.
Step-by-step explanation:
The question asks to calculate the materials quantity variance for the Haden Company, which arises when the actual quantity of materials used differs from the standard quantity expected to be used. To find the materials quantity variance, we use the formula: Material Quantity Variance = (Actual Quantity - Standard Quantity) × Standard Price. The standard material cost is given as $27.00 based on three square feet of silk at a cost of $9.00 per square foot. Therefore, for the production of 1,000 dresses, the standard quantity of silk would be 3,000 square feet (1,000 dresses × 3 square feet per dress). The actual quantity used was 3,400 square feet at a cost of $9.20 per square foot; however, for the variance, we use the standard cost per square foot.
The materials quantity variance is calculated as follows:
- Standard Quantity of Silk for 1,000 dresses = 3,000 sq ft
- Standard Cost per square foot = $9.00
- Actual Quantity of Silk used = 3,400 sq ft
- Materials Quantity Variance = (3,400 sq ft - 3,000 sq ft) × $9.00
- Materials Quantity Variance = 400 sq ft × $9.00
- Materials Quantity Variance = $3,600 Unfavorable
The variance is unfavorable because the actual quantity of silk used exceeds the standard quantity, which means the company spent more on materials than it had planned to in its standards.