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Riverside Incorporoted's actual production for... Riverside incorporated's actual production for August is 2,000 unas. The standard cost for raw material number 321 is $60 per unit consisting of 3 pounds per unit at $20 per pound. The actual cost for raw materiat number 321 lit August amounted to $57.60 per unit consisting of 3.2 pounds per unit at 5 is per pound The resulting budget variance for raw material number 321 in August was therefore $4,800 F12,000 units 1$5000−55760 s What amount of Riverside incorpotateds $4,800 F budget variance in March is attibutable to the quantity of raw material number 321 used? Murtiple Choice: 58.000 F 5.000U S12900F

User Reza Taba
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Final answer:

The quantity variance of raw materials used for Riverside Incorporated, which resulted in a $4,800 favorable budget variance for August, is attributed to the use of 400 pounds less than the standard amount of raw materials, resulting in an $8,000 favorable quantity variance.

Step-by-step explanation:

The student's question pertains to calculating the quantity variance of the raw materials used in production for Riverside Incorporated. To solve for the quantity variance, we have to compare the standard quantity of materials expected to be used for the actual production to the actual quantity used, multiplied by the standard cost per unit of raw material. The standard cost is given as $60, which consists of 3 pounds at $20 per pound. However, the actual cost reported is $57.60, with 3.2 pounds being used per unit at $18 per pound.

First, we calculate the standard quantity of materials for the actual production:

  • Standard quantity for 2,000 units = 2,000 units x 3 pounds/unit = 6,000 pounds
  • Actual quantity used = 2,000 units x 3.2 pounds/unit = 6,400 pounds
  • Quantity variance = (Actual quantity - Standard quantity) x Standard cost per pound
    = (6,400 pounds - 6,000 pounds) x $20/pound
    = 400 pounds x $20/pound
    = $8,000

The unfavorable (U) or favorable (F) status of the variance is determined by whether the actual quantity used is more than the standard (unfavorable) or less (favorable). Here, the result is a $8,000 favorable variance, showing that less raw material was used than the standard amount.

User Glauco Neves
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