Question

Gipple Corporation makes a product that uses a material with the quantity standard of 7.3 grams per unit of output and the price standard am. In January the company produced 3,400 units using 24,870 grams of the direct material. During the month the of S6.00 per gr company purchased 27,400 grams of the direct material at $6.10 per gram. The direct materials purchases variance is computed when the materials are purchased. The materials quantity variance for January is:
A) $305 F
B) S300 F
C) S300 U
D) S305 U

Answer 1

Answer:

C) $300 U

Explanation:

Gipple Corporation

Material Quantity Variance = (Actual Quantity Used * Standard Unit Cost )-

( Standard Quantity Used * Standard Unit Cost )

Material Quantity Variance =(AQ* SP) -(SQ*SP)

Material Quantity Variance = (24,870* 6)- ( 7.3* 3400 *6)

Material Quantity Variance = (24,870* 6)- (24,820* 6)

Material Quantity Variance = 149220 - 148920

Material Quantity Variance = $300 Unfavorable

As actual quantity is greater than standard quantity it is unfavorable.