Question

The following materials standards have been established for a particular product:

Standard quantity per unit of output		4.9	pounds
Standard price	$	13.70	per pound

The following data pertain to operations concerning the product for the last month:

Actual materials purchased		5,550	pounds
Actual cost of materials purchased	$	63,380
Actual materials used in production		5,050	pounds
Actual output		750	units

The direct materials purchases variance is computed when the materials are purchased.

What is the materials quantity variance for the month?

• $5,710 U

• $15,702 U

• $18,838 U

• $6,850 U

Answer 1

Answer)

Calculation of Material Quantity Variance

Material Quantity variance = (Standard quantity of material allowed for Actual production – Actual quantity of material consumed) X Standard price per pound of material

                                                        = (3,675 pounds – 5,050 pounds) X $ 13.70 per pound

                                                        = $ 18,838 (Unfavorable)

Therefore material quantity variance is $ 18,838 (Unfavorable).

Working Note:

Calculation of standard quantity of material allowed for Actual Production:

Standard quantity of material allowed for Actual Production = Standard Quantity of material allowed per unit of output X number of units produced

                                                              = 4.90 pounds X 750 units

                                                              = 3,675 pounds