Question

Gibblet Inc makes cardboard boxes. In January, they used
240700 pounds of cardboard to produce 219500 boxes.  
They paid $144 per 100 pounds for the cardboard.

The standard calls for 1.25 pounds of cardboard per box.
Gibblet budgeted $133 per 100 pounds for cardboard
for January.

Compute the Materials Quantity Variance for January. (I
only want the amount. If is is Favorable, use a positive
number. If it is Unfavorable, use a negative number).  

ROUND TO THE NEAREST DOLLAR

Answer 1

Materials Quantity Variance

Materials Quantity Variance = Standard Price x [Actual Quantity Used - Standard Quantity Allowed]

Actual Quantity = 240,700 Pounds

Actual Price = $1.44 per pound [$144 / 100 Pound]

Standard Quantity Allowed = 274,375 Pounds [219,500 Boxes x 1.25 pound per box]

Standard price = $1.33 [$133 / 100 Pound]

                 

Materials Quantity Variance = Standard Price x [Actual Quantity Used - Standard Quantity Allowed]

= $1.33 x [240,000 Pounds – 274,375 Pounds]

= $44,788 F [Favourable]

“The Materials Quantity Variance for January is $44,788 F [Favourable]”