Question

Your Company manufactures a product for which the standard material cost is $27.00 based on 12 square feet at a cost of $2.25 per square foot. A production run of 1,000 units resulted in usage of 12,600 square feet at a cost of $2.00 per square foot, a total cost of $25,200. The materials quantity variance resulting from the above production run was:

		$1,350 favorable
		$1,350 unfavorable
		$3,150 favorable
		$3,150 unfavorable

Answer 1

The correct answer is "$1,350 unfavorable" calculated as follows:

Material quantity variance = (Standard quantity for actual output - Actual quantity used) * Standard price

Standard quantity for actual output = 1,000 units * 12 square feet = 12,000 square feet

Actual quantity used = 12,600 square feet (given in question)

Standard price = $2.25 per square foot (given in question)

Therefore, material quantity variance = (12,000 - 12,600) * 2.25

Material quantity variance = $1,350 unfavorable