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Homework answers / question archive /  The standard price per pound is $220

 The standard price per pound is $220

Accounting

 The standard price per pound is $220. The standard quantity of pounds allowed per unit of finished goods is 4 pounds. • The actual quantity of materials purchased and used in production is 50,600 pounds. The actual purchase price per pound of materials was $225. • The company actually produced 13,000 units of finished goods during the period, however, its planning budget was based on 12,800 units. What is the materials quantity variance?
Multiple Choice $3,080 F $3,150 U $1,320 F $3,150 F

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The correct answer is Option A - $ 3080 F

The formula for direct materials quantity variance is:

DM quantity variance = (Actual Quantity - Standard Quantity) * Standard Price.

Actual Quantity = 50600 pounds

Standard Quantity = Number of Finished Goods *Standard Quantity of Pounds per Finished Goods

Standard Quantity = 13,000 units * 4 pounds

Standard Quantity = 52,000 pounds

Standard Price = $ 2.2

DM quantity variance = (50600 - 52000) * 2.2

DM quantity variance = (-1400) * 2.2

DM quantity variance = $ 3,080 (F)

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