Gazelle Company has the following materials standards have been established for
ID: 2416651 • Letter: G
Question
Gazelle Company has the following materials standards have been established for a particular product:
Standard quantity per unit of output
2.5
meters
Standard price
$ 20.00
per meter
The following data pertain to operations concerning the product for the last month:
Actual materials purchased
4,000
meters
Actual cost of materials purchased
$ 120,000
Actual materials used in production
3,750
meters
Actual output
4,100
units
What is the materials quantity variance for the month?
You must enter your answer in the following format: $xxx,xxx F for a favorable variance (1 space between the number and the indicator) or
$xxx,xxx U for an unfavorable variance (1 space between the number and the indicator)
YOU MUST SHOW YOUR CALCULATIONS/WORK OR I WILL THUMB DOWN :( You can be brief!!!
Standard quantity per unit of output
2.5
meters
Standard price
$ 20.00
per meter
Explanation / Answer
MATERIAL QUANTITY VARIENCE FOR THE MONTH
= ( STANDARD QUANTITY - ACTUAL QUANTITY) * STANDARD PRICE
= (10250-3750)*20
=6500 * 20
=$130,000 F
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