Question

the following materials standards have been established for a particular product
standard quantity per unit of output: 5.5 pounds
standard price: $14.30 per pound
the following data pertain to operations concerning the product for the last month:
actual materials purchased: 6,450 pounds
actual cost of materials purchased: $63,980
actual materials used in production: 5,950 pounds
actual output: 810 units
the direct materials price variance is computed when the materials are purchased.
what is the materials quantity variance for the month?
multiple choice
$7,150 u
$14,829 u
$4,960 u
$21,379 u

Explanation:

Step1: Calculate standard quantity

Standard quantity = Actual output × Standard quantity per unit
Standard quantity = \(810\times5.5 = 4455\) pounds

Step2: Calculate materials quantity variance

Materials quantity variance formula: \(=(Actual\ quantity - Standard\ quantity)\times Standard\ price\)
Substitute values: \((5950 - 4455)\times14.30\)
\(=1495\times14.30=21378.5\approx21379\) (Unfavorable as actual quantity > standard quantity)

Answer:

\( \$21,379\ U\)