question archive The following materials standards have been established for a particular product: Standard quantity per unit of output                     6

The following materials standards have been established for a particular product: Standard quantity per unit of output                     6

Subject:BusinessPrice:2.87 Bought7

The following materials standards have been established for a particular product:

Standard quantity per unit of output                     6.0         pounds

Standard price  $             14.80    per pound

The following data pertain to operations concerning the product for the last month:

Actual materials purchased                                      7,200    pounds

Actual cost of materials purchased                         $64,480                

Actual materials used in production                       6,700    pounds

Actual output                                                                 860        units

The direct materials purchases variance is computed when the materials are purchased.

What is the materials quantity variance for the month?

 

pur-new-sol

Purchase A New Answer

Custom new solution created by our subject matter experts

GET A QUOTE

Answer Preview

Answer:

Material quantity variance is $22792 Unfavourable.

?Step-by-step explanation

Computation of Material quantity Variance:

Material quantity variance =

(Standard quantity - Actual quantity)

*Standard rate

Standard quantity = 860 units * 6 pounds = 5160 unit

Actual quantity = 6700 Pounds

Material quantity variance =

(5160 - 6700)*$14.80 = $22792 Unfavourable.

If Direct material quantity variance is calculated at the time of purchase then,

Material quantity variance =

(5160 - 7200)*$14.80 = $30192 Unfavourable

Related Questions