Question

Tuscany Statuary Company manufactures bust statues of famous historical
figures. All statues are the same size, and each statue requires the
same amount of resources. Tuscany employs a standard costing system
and has the following standards in order to produce one statue:

                    standard quantity         standard price
direct materials     7 pounds                 $12 per pound
direct labor         5 hours                  $23 per hour

During 2018, Tuscany produced 7,000 statues using a total of 41,000
direct labor hours. Tuscany had no beginning inventories of any type
for 2018. During 2018, Tuscany purchased 59,000 pounds of direct
materials at a total cost of $784,700. At December 31, 2019, Tuscany
had 6,000 pounds of direct materials in its inventory. The total cost
of direct labor for Tuscany during 2018 was $861,000.

Calculate Tuscany's direct material quantity variance for 2018. If the
variance is favorable, place a minus sign in front of your answer
(i.e., -5000). If the variance is unfavorable, simply enter your answer
as a number (i.e., 5000).

Answer 1

Actual Qty of materials used = Materials purchased - Ending materials inventory

= 59,000 pounds - 6,000 pounds = 53,000 pounds

Standard Qty of material required for actual production = Actual units produced*Std Qty per unit

= 7,000 statue*7 pounds per statue = 49,000 pounds

Standard price per pound = $12 per pound

Direct Material Quantiry Variance = (Std Qty - Actual Qty used)*Std Price per pound

= (49,000 pounds - 53,000 pounds)*$12

= 4,000 pounds*$12 = $48,000 Unfavorable