EKPN Co.produces wooden boxes.The company's standards per box require 6 boards, each costing $10 per board, and half of an hour of direct labour.The standard labour rate is $15 per hour.In August, EKPN Co.Purchased 12,000 boards for a total cost of $123,000.It used 11,500 boards to manufacture 1,900 boxes.Total labour hours were 1,000 hours, and total labour costs were $16,250.What was the material quantity variance for August?
A)$5,000 U
B)$5,000 F
C)$1,000 U
D)$1,000 F

Question

Quizplus · Accepted Answer

To calculate the material quantity variance, we need to compare the actual quantity of materials used to the standard quantity that should have been used based on the number of boxes manufactured.

Standard quantity of boards required per box = 6 boards
Actual quantity of boards used = 11,500 boards
Actual number of boxes produced = 1,900 boxes

Therefore, standard quantity of boards that should have been used = 6 boards per box x 1,900 boxes = 11,400 boards

Material quantity variance = Actual quantity - Standard quantity x Standard price per unit 
= (11,500 - 11,400) x $10 
= $1,000 unfavorable (U)

Therefore, the answer is (C) $1,000 U.

EKPN CoProduces Wooden Boxes