Question

Turrubiates Corporation makes a product that uses a material with the following standards: Standard quantity 7.6 liters per unit Standard price $ 2.10 per liter Standard cost $ 15.96 per unit The company budgeted for production of 3,400 units in April, but actual production was 3,500 units. The company used 27,200 liters of direct material to produce this output. The company purchased 19,700 liters of the direct material at $2.2 per liter. The direct materials purchases variance is computed when the materials are purchased. The materials quantity variance for April is:a.$1,564 U

b.$1,496 U
c.$1,564 F
d.$1,496 F

Answer 1

Direct material quantity variance= $1,260 unfavorable

Step-by-step explanation:

Giving the following information:

Standard quantity of 7.6 liters per unit

Standard price $ 2.10 per liter

The company budgeted for production of 3,400 units.

The actual production was 3,500 units.

The company used 27,200 liters of direct material to produce this output.

To calculate the direct material quantity variance, we need to use the following formula:

Direct material quantity variance= (standard quantity - actual quantity)*standard price

Standard quantity= 3,500 units* 7.6= 26,600

Direct material quantity variance= (26,600 - 27,200)*2.1= $1,260 unfavorable

It is unfavorable because the company used more material than estimated to produce 3,500 units.