The Fletcher Company uses standard costing.The following data are available for October: $\begin{array} { l r }
\text { Actual quantity of direct materials used } & 23,500 \text { kilograms } \
\text { Standard price of direct materials } & \$ 2 \text { per kilogram } \
\text { Materials quantity variance } & \$ 1,000 \text { favourable }
\end{array}$ What was the standard quantity of material allowed for October production?
A) 23,000 kilograms.
B) 24,000 kilograms.
C) 24,500 kilograms.
D) 25,000 kilograms.

Question

The Fletcher Company uses standard costing.The following data are available for October: $\begin{array} { l r } 
\text { Actual quantity of direct materials used } & 23,500 \text { kilograms } \
\text { Standard price of direct materials } & \$ 2 \text { per kilogram } \
\text { Materials quantity variance } & \$ 1,000 \text { favourable }
\end{array}$ What was the standard quantity of material allowed for October production?
A) 23,000 kilograms.
B) 24,000 kilograms.
C) 24,500 kilograms.
D) 25,000 kilograms.

Quizplus · Accepted Answer

The materials quantity variance formula is:
Materials quantity variance = (actual quantity of direct materials used - standard quantity of direct materials allowed) × standard price of direct materials

We are given actual quantity of direct materials used = 23,500 kilograms and materials quantity variance = $1,000 favourable. We can rearrange the formula to solve for the standard quantity of direct materials allowed:
Standard quantity of direct materials allowed = actual quantity of direct materials used - (materials quantity variance ÷ standard price of direct materials)

Standard quantity of direct materials allowed = 23,500 - (1,000 ÷ 2) = 23,000 kilograms.

Therefore, the standard quantity of material allowed for October production is 23,000 kilograms.

The Fletcher Company Uses Standard Costing What Was the Standard Quantity of Material Allowed for October