Question

The following materials standards have been established for a particular product: Standard quantity per unit of output 5.9pounds Standard price$14.70per pound The following data pertain to operations concerning the product for the last month: Actual materials purchased 7,050pounds Actual cost of materials purchased$64,380 Actual materials used in production 6,550pounds Actual output 850units The direct materials purchases variance is computed when the materials are purchased. What is the materials quantity variance for the month

Answer 1

Answer:

Usage variance = $22,564.5 unfavorable

Explanation:

A material usage variance occurs when the standard quantity required to active a particular level of production is higher or lower than than the actual actual quantity used. A favorable variance would mean than less quantity of materials were used than the standard to achieve a given output level. And an adverse variance would mean the opposite

                                                                                    Pounds

850 units should have used ( 850× 5.9 pounds)         5,015

but did use                                                                      6,550

Usage variance                                                             1,535 unfavorable

×    standard price                                                         $14.70  

Usage variance                                                           22,564.5 unfavorable                                        

Usage variance = $22,564.5 unfavorable