Question

The following materials standards have been established for a particular raw material used in the company's sole product:

Standard quantity per unit of output: 1 pound
Standard price: $16.60 per pound
The following data pertain to operations concerning the product for the last month:
Actual materials purchased: 2,200 pounds
actual cost of materials purchased: 34,650
actual materials used in production: 1,900 pounds
actual oupout: 2,100 units
What is the materials quantity variance for the month?
a) 3,320 F
b) 3,150 F
c) 4,980 U
d) 4,725 U

Answer 1

a) 3,320 F

Step-by-step explanation:

The computation of the material quantity variance is shown below:

= Standard Price × (Standard Quantity - Actual Quantity)

= $16.60 × (1 pounds × 2,100 units - 1,900 pounds)

= $16.60 × (2,100 pounds - 1,900 pounds)

= $16.60 × 200 pounds

= $3,320 favorable

The material quantity variance comes in favorable as standard quantity is more than the actual quantity so it should be favorable