Question

Sheffield Corp. has a materials price standard of $2.00 per pound. 4900 pounds of materials were purchased at $2.20 a pound. The actual quantity of materials used was 4900 pounds, although the standard quantity allowed for the output was 4000 pounds. Sheffield Corp.'s materials quantity variance is:_____.

a. $1980 U.
b. $1800 F.
c. $1800 U.
d. $1980 F.

Answer 1

a. $1,980 U

Step-by-step explanation:

We will compute the direct materials quantity variance using the formula below.

Direct materials quantity variance =

(Standard quantity allowed - Actual quantity of materials) × Materials price standard

Fixing in the values, we'll have;

Direct materials quantity variance

= (4,000 pounds - 4,900 pounds) × $2.20 per pound

= -900 pounds × $2.20 per pound

= -$1,980

= $1,980 U