The Lucy Corporation purchased and used 129,000 board feet of lumber in producti
ID: 2437224 • Letter: T
Question
The 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 materials quantity variance is
63,000 favorable
63,000 unfavorable
59,400 unfavorable
59,400 favorable
a.63,000 favorable
b.63,000 unfavorable
c.59,400 unfavorable
d.59,400 favorable
Explanation / Answer
d. 59,400 favorable
Direct Materials Quantity Variance = (Actual Quantity – Standard Quantity) × Standard Price
Standard quantity = Actual production × Standard material quantity per unit = 23,500 units × 5.7 board feet = 133,950 board feet
Direct Materials Quantity Variance = (129,000 board feet – 133,950 board feet) × $12.00 = $59,400 Favorable Variance
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