A manufacturing company has a standard quantity of direct materials of 7 pounds per unit at a standard price of $2.20 per pound. In April the actual material price was $2.40 per pound and the company produced 5,600 units. If the company experienced a favorable material quantity variance of $6,820 during the month, how much was the actual quantity of material used? 35,500 pounds 32,542 pounds 42,300 pounds 36,100 pounds 41,500 pounds
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
A manufacturing company has a standard quantity of direct materials of 7 pounds per unit at a standard price of $2.20 per pound. In April the actual material price was $2.40 per pound and the company produced 5,600 units. If the company experienced a favorable material quantity variance of $6,820 during the month, how much was the actual quantity of material used?
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35,500 pounds |
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32,542 pounds |
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42,300 pounds |
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36,100 pounds |
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41,500 pounds |
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