Assume the following: The standard price per pound is $2.15. The standard quantity of pounds allowed per unit of finished goods is 4 pounds. The actual quantity of materials purchased was 53,000 pounds, whereas the quantity of materials used in production was 50,100 pounds. The actual purchase price per pound of materials was $2.25. The company produced 13,000 units of finished goods during the period. What is the materials quantity variance? Multiple Choice $6,235 F $6,525 F $4,275 F $4,085 F
Assume the following: The standard price per pound is $2.15. The standard quantity of pounds allowed per unit of finished goods is 4 pounds. The actual quantity of materials purchased was 53,000 pounds, whereas the quantity of materials used in production was 50,100 pounds. The actual purchase price per pound of materials was $2.25. The company produced 13,000 units of finished goods during the period. What is the materials quantity variance? Multiple Choice $6,235 F $6,525 F $4,275 F $4,085 F
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
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Question
Assume the following:
- The standard price per pound is $2.15.
- The standard quantity of pounds allowed per unit of finished goods is 4 pounds.
- The actual quantity of materials purchased was 53,000 pounds, whereas the quantity of materials used in production was 50,100 pounds.
- The actual purchase price per pound of materials was $2.25.
- The company produced 13,000 units of finished goods during the period.
Multiple Choice
-
$6,235 F
-
$6,525 F
-
$4,275 F
-
$4,085 F
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