Question

Luma Incorporated has provided the following data concerning one of the products in its standard cost system.

Inputs Standard Quantity or Hours per Unit of Output Standard Price or Rate
Direct materials 4.8 ounces $6.90 per ounce

The company has reported the following actual results for the product for September:

Actual output 2,100 units
Raw materials purchased 10,500 ounces
Actual price of raw materials $7.80 per ounce
Actual cost of raw materials purchased $81,900
Raw materials used in production 10,090 ounces


The raw materials quantity variance for the month is closest to: __________

Answer 1

69 U

Step-by-step explanation:

The computation of the raw materials quantity variance for the month is shown below:

But before that the standard usgae is

standard usage = Actual output × Standard Qty/hours per unit

= 2100 x 4.8

= 10,080 Units

Now Raw Material Quantity Variance is

= (Actual usage in units - Standard usage in units) × Standard cost per unit

= (10,090 - 10,080) × 6.9

= 69 U