Question

The following standard direct material cost/unit have been established for product N90:

           5 pounds of direct material at $10 per pound

During June 2,000 units of product N90 were made, and the quantity variance is favorable $2,000 and price variance is Unfavorable $9,800. All direct material purchased in June was used for producing the 2,000 units. How many pounds of direct material were actually used during June?

Group of answer choices

none of the other answers

9,800 pounds

10,000 pounds

9,200 pound

Answer 1

Direct materials quantity variance = $2,000 favorable

Standard price = $10 per pound

Standard quantity = 5 pound per unit

Actual output = 2,000 units

Standard quantity for actual output = Standard quantity x Actual output

= 5 x 2,000

= 10,000 pounds

Actual quantity= ?

Direct materials quantity variance = Standard price x ( Standard quantity - Actual quantity)

2,000 = 10 x (10,000-Actual quantity)

2,000 = 100,000- 10 Actual quantity

10 Actual quantity = 98,000

Actual quantity = 9,800 pounds

Direct material were actually used during June 9,800 pounds

first option is correct.