Degregorio Corporation makes a product that uses a material with the following d

Question

Degregorio Corporation makes a product that uses a material with the following direct material standards:

The company produced 6,600 units in November using 16,180 kilos of the material. During the month, the company purchased 18,220 kilos of the direct material at a total cost of $105,676. The direct materials purchases variance is computed when the materials are purchased.

The materials quantity variance for November is:

a. $1,946 U

b. $2,040 F

c. $1,946 F

d. $2,040 U

Explanation / Answer

Material Quantity variance = Standard Price * (Actual Quantity used - Standard Quantity) Material Quantity variance = $6 * (16,180 - (6,600*2.4)) Material Quantity variance = $2,040 U

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