Final answer:
The materials quantity variance for producing 100 units of product A is calculated based on the difference between the actual cost and the standard cost. Since the actual quantity used matches the standard quantity, and the variance is due to the price change, the variance is $0, which means the correct option is C) 0.
Step-by-step explanation:
The student asked for help in calculating the materials quantity variance for product A. The standard specification is 6 square feet of material at $10 per square foot for a single unit of product A. If 100 units are produced, the expected quantity of materials needed would be 600 square feet. In this scenario, the firm actually used the expected 600 square feet, but at a higher rate of $11 per square foot instead of $10.
To find the materials quantity variance, you need to compare the actual quantity used at the standard cost against the standard quantity allowed at the standard cost. Here, the actual quantity is the same as the standard quantity, so the variance is entirely due to the difference in price:
- Standard quantity allowed for actual production: 100 units x 6 square feet/unit = 600 square feet
- Standard cost per square foot: $10
- Actual cost per square foot: $11
- Total standard cost: 600 square feet x $10/square foot = $6,000
- Total actual cost: 600 square feet x $11/square foot = $6,600
Since the actual cost is greater than the standard cost, this represents an unfavorable variance. The calculation for the materials quantity variance will be as follows:
Materials Quantity Variance = (Actual Quantity x Standard Price) - (Standard Quantity x Standard Price)
Materials Quantity Variance = (600 square feet x $10/square foot) - (600 square feet x $10/square foot)
So the materials quantity variance is $0, because the actual quantity used was exactly as planned. Therefore, the correct option for the materials quantity variance in this scenario is C) 0.