Tuscany Statuary Company manufactures bust statues of famous historical figures.

Question

 Tuscany Statuary Company manufactures bust statues of famous historical figures. All statues are the same size, and each statue requires the same amount of resources. Tuscany employs a standard costing system and has the following standards in order to produce one statue:                      standard quantity         standard price direct materials     7 pounds                 $12 per pound direct labor         5 hours                  $23 per hour  During 2018, Tuscany produced 7,000 statues using a total of 41,000 direct labor hours. Tuscany had no beginning inventories of any type for 2018. During 2018, Tuscany purchased 59,000 pounds of direct materials at a total cost of $784,700. At December 31, 2019, Tuscany had 6,000 pounds of direct materials in its inventory. The total cost of direct labor for Tuscany during 2018 was $861,000.  Calculate Tuscany's direct material quantity variance for 2018. If the variance is favorable, place a minus sign in front of your answer (i.e., -5000). If the variance is unfavorable, simply enter your answer as a number (i.e., 5000).

Explanation / Answer

Actual Qty of materials used = Materials purchased - Ending materials inventory

= 59,000 pounds - 6,000 pounds = 53,000 pounds

Standard Qty of material required for actual production = Actual units produced*Std Qty per unit

= 7,000 statue*7 pounds per statue = 49,000 pounds

Standard price per pound = $12 per pound

Direct Material Quantiry Variance = (Std Qty - Actual Qty used)*Std Price per pound

= (49,000 pounds - 53,000 pounds)*$12

= 4,000 pounds*$12 = $48,000 Unfavorable

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