Question

Information concerning Johnston Co.'s direct materials costs is as follows: Standard price per pound $6.45 Actual quantity purchased 2,850 pounds Actual quantity used in production 2,750 pounds Units of product manufactured 700 Materials purchase-price variance–favorable $855 Budget data for the period: Units to manufacture 1,000 Units of direct materials 4,000 pounds The direct materials usage variance for the period, rounded to two decimal places, was:a. $713. b. $6.50 c. $6.12 d. $6.75 e. $615 f. $6.15

Answer 1

Answer:

The correct answer is $322,5 favorable.

It used 50 pounds less than estimated for the number of units produced.

Explanation:

Giving the following information:

Standard price per pound $6.45

Actual quantity used in production 2,750 pounds

Units of product manufactured 700

Materials purchase-price variance–favorable $855

Budget data for the period:

Units to manufacture 1,000

Units of direct materials 4,000 pounds

First, we need to determine the standard quantity required.

Standard quantity= 4,000 pounds/ 1,000 units= 4 pounds per unit

Now, we can calculate the quantity variance:

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

Direct material quantity variance= (2,800 - 2,750)*6.45= 322.5 favorable