Question

Atkins, Inc. produces a product requiring 8 pounds of material at $1.50 per pound. Atkins produced 10,000 units of this product during 2019 resulting in a $30,000 unfavorable materials quantity variance. How many pounds of direct material did Atkins use during 2019?

Answer 1

Answer:

100,000 pounds

Step-by-step explanation:

The expected value (E) spent on direct materials used by Atkins,Inc for 2019 is:

$E=\ 1.50*8*10,000\\E= \ 120,000$

Since there was an unfavorable $30,000 variance in materials quantity, the actual value spent (Av) on direct materials is:

$A_{v}= \ 120,000 +\ 30,000\\A_{v}= \ 150,000$

The amount of direct material (M), in pounds, used during 2019 is:

$M=\frac{\ 150,000}{\ 1.50} \\M=100,000 \ pounds$