Stench Foods Corporation uses a standard cost system to collect costs related to

Question

Stench Foods Corporation uses a standard cost system to collect costs related to the production of its garlic flavored yogurt. The garlic (materials) standards for each container of yogurt produced are 0.8 ounces of crushed garlic at a standard cost of $2.30 per ounce. During the month of June, Stench purchased 75,000 ounces of crushed garlic at a total cost of $171,000. Stench used 64,000 of these ounces to produce 71,500 containers of yogurt. The direct materials purchases variance is computed when the materials are purchased. What is Stench's materials quantity variance for June? $1,500 Favorable

$15,640 Unfavorable

$17,250 Favorable

$23,800 Favorable

Explanation / Answer

Answer $ 15640 unfavorable

Notes:

Stench's materials quantity variance = (Standard Quantity - Actual Quantity) * standard rate

Stnadard quantity for 71500 containers of Yogurt = 71500*0.8 = 57200 ounces of Crushed Garlic

Actual quanity used = 64000

standard rate = $2.3

Therefore Material quantity variance = (64000-57200)*2.3 = $15640 Unfavorable

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