Question

The company budgeted for production of 2,800 units in April, but actual production was 2,900 units. The company used 21,200 liters of direct material to produce this output. The company purchased 19,100 liters of the direct material at $1.60 per liter. The direct materials purchases variance is computed when the materials are purchased. The materials quantity variance for April is:

Answer 1

the material quantity variance is $1,350 unfavorable

Step-by-step explanation:

The computation of the material quantity variance is given below:

Materials quantity variance is

= (Actual quantity × Standard price) - (Standard quantity × Standard price)

= (21,200 × $1.50) - [(2,900 × 7) × 1.5]

= $31,800 - $30,450

= $1,350 Unfavourable

Hence, the material quantity variance is $1,350 unfavorable