Homework SourseEach radio should require 3 kg of plastic at a standard pric
Each radio should require 3 kg of plastic, at a standard price of $1.45 per kg. In order to produce 3,000 radios, the company purchased and used 10,000 kg for $15,000. The materials quantity variance was:
a) $1,450 U
b) $1,450F
c) $4,350F
d) $4,350U
Solution
a) $1,450 U
Working:
| Material Quantity Variance | = | (Standard Quantity - Actual Quantity)*Standard Price per unit | |||||||||
| = | (9000-10000)*1.45 | ||||||||||
| = | $ 1,450 U | ||||||||||
| Working: | |||||||||||
| Standard Quantity of materials | = | Actual production x Standard quantity per unit produced | |||||||||
| = | 3000 | x | 3 | ||||||||
| = | 9000 | ||||||||||
