A manufacturing company has a standard quantity of direct materials of 6 pounds per unit at a standard price of $2.20 per pound. In April the actual material price was $2.40 per pound and the company produced 5,500 units. If the company experienced a favorable material quantity variance of $6,600 during the month, the actual quantity of material used was:
A. 30,000 pounds.
B. 33,000 pounds.
C. 35,750 pounds.
D. 36,000 pounds.
ANSWER:
Standard direct materials per unit = 6 pounds
Standard direct materials price per pound = $2.20
Actual direct materials price per pound = $2.40
Number of units produced = 5,500
Standard direct materials allowed = Standard direct materials per unit * Number of units produced
Standard direct materials allowed = 6 * 5,500
Standard direct materials allowed = 33,000 pounds
Materials Quantity Variance = Standard direct materials price per pound * (Standard direct materials allowed - Actual direct materials used)
$6,600 = $2.20 * (33,000 - Actual direct materials used)
3,000 = 33,000 - Actual direct materials used
Actual direct materials used = 30,000 pounds
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