Leonesio Corporation makes a product that uses a material with the following sta

Question

Leonesio Corporation makes a product that uses a material with the following standards:

The company budgeted for production of 3,100 units in August, but actual production was 3,200 units. The company used 27,600 kilos of direct material to produce this output. The company purchased 29,000 kilos of the direct material at a total cost of $118,900. The direct materials purchases variance is computed when the materials are purchased.

The materials quantity variance for August is:

$5,576 F

$5,576 U

$5,440 F

$5,440 U

Standard quantity 8.2 kilos per unit Standard price $ 4.00 per kilo Standard cost $ 32.80 per unit

Explanation / Answer

Answer:-The materials quantity variance for August is $5440 U.

Explanation:-

Material quantity variance = (Standard quantity - Actual quantity)*Standard price per unit

= (26240 kilos - 27600 kilos)*$4.00 per kilo

= $5440 Unfavourable

Where:-

Standard quantity = Actual production *Standard quantity (in kilos) per unit

= 3200 units *8.2 kilo per unit

=26240 kilos

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