Thomas Company produces one product, the E4501.The standards for E4501 include the use of 25 yards of raw material at a standard price of $4.42 per yard.During a recent month, the company used 65,000 yards of raw material to produce 2,580 units of E4501.Thomas purchased this material at a cost of $4.37 per yard.How much is the material quantity variance?
A)$2,185 unfavorable
B)$2,185 favorable
C)$2,210 unfavorable
D)$3,225 favorable

Question

Quizplus · Accepted Answer

Material Quantity Variance = (Actual Quantity Used - Standard Quantity Allowed) x Standard Price

Standard Quantity Allowed = 25 yards per unit x 2,580 units = 64,500 yards

Actual Quantity Used = 65,000 yards

Material Quantity Variance = (65,000 - 64,500) x $4.42 = $2,210 unfavorable.

Therefore, the answer is C, $2,210 unfavorable.

Thomas Company Produces One Product, the E4501