Question

Leonesio Corporation makes a product that uses a material with the following standards:
Standard quantity 8.2 kilos per unit
Standard price $ 4.00 per kilo
Standard cost $ 32.80 per unit
The company budgeted for production of 3,100 units in August, but actual production was 3,200 units. The company used 27,600 kilos of direct material to produce this output. The company purchased 29,000 kilos of the direct material at a total cost of $118,900. The direct materials purchases variance is computed when the materials are purchased.
Required:
1. The materials quantity variance for August is ______________.
Group of answer choices:
O $5,576 F
O $5,576 U
O $5,440 F
O $5,440 U

Answer 1

Answer:

$5440 Unfavorable

Explanation:

Given that

Actual production = 3,200 units

Actual quantity = 27,600 kilos

Standard price  = $4.00 per kilos

Standard quantity  = 8.2 kilos per unit

The computation of materials quantity variance is given below:-

= (Standard quantity - Actual quantity) × Standard price

= (26,240 kilos - 27,600 kilos) × $4.00 per kilos

= $5440 Unfavorable

So,

Standard quantity = Actual production × Standard quantity

= 3,200 units × 8.2 kilos per unit

=26,240 kilos