Question

Using the information provided, calculate the materials quantity variance.







Standard price:

$3.00 per pound

Actual price:

$3.20 per pound

Actual quantity used:

5,200 pounds

Standard quantity allowed:

5,000 pounds

Multiple choice question.

$600 U


$640 U


$640 F


$600 F

Answer 1

To calculate the materials quantity variance, we can use the following formula:

\[
\text{Materials Quantity Variance} = (\text{Actual Quantity Used} - \text{Standard Quantity Allowed}) \times \text{Standard Price}
\]

In this case, we have:

- Actual Quantity Used = 5,200 pounds
- Standard Quantity Allowed = 5,000 pounds
- Standard Price = $3.00 per pound

Now, we can plug the values into the formula:

1. Calculate the difference:
\[
\text{Actual Quantity Used} - \text{Standard Quantity Allowed} = 5,200 - 5,000 = 200 \text{ pounds}
\]

2. Multiply by the standard price:
\[
200 \text{ pounds} \times \$3.00/\text{pound} = 600
\]

Since the actual quantity used is greater than the standard quantity allowed, this results in an unfavorable variance (U).

Thus, the materials quantity variance is:

\[
\text{Materials Quantity Variance} = \$600 \, U
\]

The correct answer is: **$600 U**.