Question

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 1

Answer is 30,000 pounds

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