A company manufactures a product that required three types of material: Material

Question

A company manufactures a product that required three types of material: Material A, Material B, and Material C. The materials are substitutable to some degree and the company does experience some variance in the mbx of materials that go into the final product Information for production for the month of April are provided below. The company produced 10,000 units of output in April DATA FOR MATERIALS USED TO MANUFACTURE COMPANY PRODUCT FOR MONTH OF APRIL Standard Quantity Per Unit of Output Total Actual Standard Price Per Quantity Used Unit of Input Material A 45,000 S 2.00 Material B 35,000 3.00 Material C 30,000 5.00 What is the quantity variance for Material C? Select one a $50,000 u b, 510.000 U. Oc. $40,000 U d. S10.000 F

Explanation / Answer

Answer = 50,000 Unfavourable

Standard price per unit of input = 5

Actual quantity used = 30,000

Standard quantity allowed = output * Standard quantity per unit of output

= 10,000 units * 2 per unit of output

= 20,000

Quantity Variance = (SQ - AQ) * SP

= (20,000 - 30,000) * 5

= (50,000)

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