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1 March, 15:41

Underwood Corporation makes a product that uses a material with the quantity standard of 7.3 grams per unit of output and the price standard of $6.00 per gram. In January the company produced 3,400 units using 24,870 grams of the direct material. During the month the company purchased 27,400 grams of the direct material at $6.10 per gram. The direct materials purchases variance is computed when the materials are purchased. The materials quantity variance for January is:

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  1. 1 March, 16:05
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    -$300 Unfavorable

    Explanation:

    The computation of materials quantity variance for January is shown below:-

    For computing the materials quantity variance for January first we need to find out the Standard quantity of material which is here below:-

    Standard quantity of material for 3400 units will be: 3400 * 7.3

    = 24,820 grams

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

    $6.00 * (24,820 grams - 24,870 grams)

    = $ 6 * (-50 grams)

    = - $300 Unfavorable

    Therefore we have applied the above formula.
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