Turrubiates Corporation makes a product that uses a material with the following standards: Standard quantity 7.9 liters per unit Standard price $ 2.40 per liter Standard cost $ 18.96 per unit The company budgeted for production of 3,700 units in April, but actual production was 3,800 units. The company used 30,700 liters of direct material to produce this output. The company purchased 20,000 liters of the direct material at $2.5 per liter. The direct materials purchases variance is computed when the materials are purchased. The materials quantity variance for April is:

Question

Livingston

Business

9 June, 16:31

Turrubiates Corporation makes a product that uses a material with the following standards: Standard quantity 7.9 liters per unit Standard price $ 2.40 per liter Standard cost $ 18.96 per unit The company budgeted for production of 3,700 units in April, but actual production was 3,800 units. The company used 30,700 liters of direct material to produce this output. The company purchased 20,000 liters of the direct material at $2.5 per liter. The direct materials purchases variance is computed when the materials are purchased. The materials quantity variance for April is:

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Answers (1)

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Syllable · Answer 1

The materials quantity variance for April is $ 99,235.20 (unfavourable)

Explanation:

According to the given data we have the following:

standard quantity allowed for actual production = actual production*standard cost=3,800*$18.96=72,048

Actual quantity=30,700

Standard rate = $2.40

Therefore, to calculate The materials quantity variance we would have to use the following formula:

materials quantity variance = (standard quantity allowed for actual production - Actual quantity) * Standard rate

materials quantity variance = (72,048 - 30,700) * $2.4

materials quantity variance = $ 99,235.20 (unfavourable)