Question

During June, Zinc Company produced 10,000 chainsaw blades. The standard quantity of material allowed per unit was 2 pounds of steel per blade at a standard cost of $10 per pound. Zinc determined that it had a favorable materials usage variance of $1,600 for June. Calculate the actual quantity of materials used by Zinc Company in June. Group of answer choices 19,840 pounds 19,660 pounds 19,680 pounds 19,860 pounds

Answer 1

19,840 pounds

Explanation:

The computation of actual quantity of materials is shown below:-

Materials usage variance = (Selling quantity - Actual quantity) × Standard Price

= (10,000 × 2 - Actual quantity) × $10 = $1,600

= (20,000 - Actual quantity) × $10 = $1,600

= 20,000 - Actual quantity = $160

Actual quantity = 20,000 - $160

= $19,840 pounds

Therefore for computing the actual quantity of materials we simply applied the above formula.