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16 September, 22:40

The standard amount of materials required to make one unit of Product Q is 4 pounds. That's static budget showed a planned production of 5,900 units. During the period, the company actually produced 6,000 units of product. The actual amount of materials used averaged 3.9 pounds per unit. The standard price of material is $2 per pound. Based on this information, the materials usage variance was:

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  1. 17 September, 01:59
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    Material Quantity Variance = 2400 favorable

    Explanation:

    Given

    Actual units = 6000

    Planned Units = 5900

    Actual Quantity used per unit = 3.9 pounds

    Actual Quantity=3.9 pounds*6000 = 23400 pounds

    Standard quantity for actual units = 4 * 6000 = 24000

    Standard quantity used per unit = 4 pounds

    Standard Price = $ 2 per pound

    Formula

    Material Quantity Variance = (Standard Price) * (Actual Quantity - Standard Quantity)

    Working

    Material Quantity Variance = (4) * (23400 - 24000) = 4 * 600 = 2400 favorable

    as the actual quantity is more than the standard quantity the variance is favorable.
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