Question

Vaughn Manufacturing has a materials price standard of $2.00 per pound. 4900 pounds of materials were purchased at $2.20 a pound. The actual quantity of materials used was 4900 pounds, although the standard quantity allowed for the output was 3700 pounds. Vaughn Manufacturing's materials quantity variance is

Answer 1

Answer:

$2,400 Unfavourable

Explanation:

Direct material quantity variance = (Standard quantity - Actual quantity) × Standard cost

Given that:

Standard quantity = 3,700 pounds

Actual quantity = 4,900 pounds

Standard cost = $2

Therefore,

Direct materials quantity variance

= (3,700 - 4,900) × 2

= - $2,400

= $2,400 Unfavourable

The difference between the standard and actual quantity is negative. We used more pounds than expected, hence variance will be unfavourable.