Question

Lucy Corporation purchased and used 129,000 board feet of lumber in production, at a total cost of $1,548,000. Original production had been budgeted for 22,000 units with a standard material quantity of 5.7 board feet per unit and a standard price of $12 per board foot. Actual production was 23.500 units The direct materials quantity vanance is______________.

a. $63,000 favorable
b. $59,400 unfavorable
c. $63,000 unfavorable
d. $59.400 favorable

Answer 1

The direct materials quantity variance is  59,400 favourable.

b. $59,400 unfavourable

Explanation:

Material Quantity variance= standard price( Actual Quantity used - standard quantity)

The standard quantity is $23,500 \times 5.7 =133,950$

$(Actual \ production \times Standard \ unit)$

$( 23,500 \times 5.7)$ standard price( Actual Quantity used - standard quantity)

$12(129,000-133,950)= 59,400 F$

Therefore, Lucy corporation's material quantity variance after using actual quantity of 129,000 at a standard price of 12 and the standard quantity of 133,950 is 59,400 favorable.