Question

Cooper Company has a direct materials standard of 2 gallons of input at a cost of $12.50 per gallon. During July, Cooper Company purchased and used 6,500 gallons, paying $46,900. The direct materials quantity variance was $750 unfavorable. How many units were produced?

Answer 1

Answer:

3,220 units

Explanation:

The computation of the material quantity variance is shown below:

Direct material quantity variance = Standard Price × (Standard Quantity - Actual Quantity)

$750 = 2 gallons × $12.50 × (6,500 gallons ÷ 2 - actual quantity)

$750 = $25  × (6,500 gallons ÷ 2 - actual quantity)

$30 = 3,250 - actual quantity

So, the actual quantity would be

= 3,250 - $30

= 3,220 units

The Standard Price is computed below:

= 2 gallons × $12.50

The standard quantity is computed below:

= 6,500 gallons ÷ 2

= 3,250 units