question archive 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?
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