Question

The following materials standards have been established for a particular product: Standard quantity per unit of output 1.7 meters Standard price $19.80 per meter The following data pertain to operations concerning the product for the last month: Actual materials purchased 5,800 meters Actual cost of materials purchased $113,680 Actual materials used in production 5,100 meters Actual output 3,200 units What is the materials quantity variance for the month?
a. $13,720 U
b. $6,732 F
c. $13,860 U
d. $6,664 F

Answer 1

Answer:

Direct material quantity variance= $6,732 favorable

Explanation:

Giving the following information:

Standard quantity per unit of output 1.7 meters

Standard price $19.80 per meter

Actual materials purchased 5,800 meters

Actual materials used in production 5,100 meters

Actual output 3,200 units

First, we need to determine the standard quantity of material to produce 3,200 units:

Standard quantity= 1.7*3,200= 5,440 meters

Now, using the following formula, we can calculate the direct material quantity variance:

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

Direct material quantity variance= (5,440 - 5,100)*19.8= $6,732 favorable

It is favorable because it used less material than estimated.