Question

A small component is purchased for the use in the production of a major product. The standard price of the component is $0.85. During a recent period, 7,800 units were purchased and 6,800 were actually used. The standard quantity of units allowed for the actual output of the period was 6,540 units. What was the materials quantity variance

Answer 1

See below

Step-by-step explanation:

Given the above information,

Material quantity variance is computed as;

= (Actual quantity - Standard quantity of units allowed for the actual output )

Actual quantity = 6,800 units

Standard quantity = 6,540 units

= 6,800 - 6,540

= 260 units

Therefore, the materials quantity variance is 260 Unfavourable.

It is unfavourable because the standard is higher than the actual