1. The standard amount of materials required to make one unit of Product Q is 4

Question

1. The standard amount of materials required to make one unit of Product Q is 4 pounds. Suarez’s static budget showed a planned production of 4,000 units. During the period the company actually produced 4,100 units of product. The actual amount of materials used averaged 4.1 pounds per unit. The standard price of material is $1 per pound. Based on this information, the materials usage variance was: [5 points]      

            A) $400 unfavorable

                   B) $410 unfavorable

            C) $400 favorable

            D) $410 favorable

            E)   None of the above

Explanation / Answer

Materials usage variance = SR*(AQ-SQ) =1*(4100*4.1-4100*4)= 410 unfavorable Option B is correct

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