Question

The following cost information is for Leslie Company. Actual results

Total cost of purchasing material $58,000

Number of labor hours worked 1,000 hours

Number of material pounds used in production 5,850 pounds

Total labor cost $48,000 Number of units produced 280 units

Number of material pounds purchased 6,250 pounds

Leslie Company has established the following standards.

Price per pound of materials $10.00 per pound

Number of pounds of material to produce one unit 20 pounds

Standard labor rate $50.00 per hour

Number of labor hours to produce one unit 3 hours

Compute Leslie’s Materials Quantity Variance.

$1,500 Favorable

$4,500 Favorable

$4,500 Unfavorable

$2,500 Unfavorable

$2,500 Favorable

$1,500 Unfavorable

Answer 1

• Correct Answer = Option #4: Material Quantity variance = $ 2500 Unfavourable

Material Quantity Variance
(	Standard Quantity = 280 units x 20 std pounds	-	Actual Quantity used	)	x	Standard Rate
(	5600	-	5850	)	x	$                        10.00
	-2500
	Variance		$              2,500.00			Unfavourable-U