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: Standard quantity 3.7 kilos per unit Standard price $5 per kilo The company produced 6,300 units in November using 23,780 kilos of the material. During the month, the company purchased 25,950 kilos of the direct material at a total cost of $124,560. The direct materials purchases variance is computed when the materials are purchased.

The materials quantity variance for November is:

$2,350 F $2,256 F $2,350 U $2,256 U

Explanation / Answer

Actual Quantity purchased          25,950 Actual cost       124,560 Cost per unit =124560/25950 Cost per unit 4.8 Actual output 6300 Material Variance Standard Budgeted based on actual results Actual Price              5.00                                      5.00            4.80 Quanity              3.70                                 23,310       23,780 Cost per unit            18.50                               116,550     114,144 Total Material Cost varaince                                 (2,406) Material quanitity variance = (Standard Quantity - Actual Quantity) * Budgered Price = (23310 - 23780)*5          (2,350) So the quantity variance is 2,350 unfavorable

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