) Saskatoon Company uses two raw materials, A and B, in the manufacture of its only product: Zizbo. The materials are very close substitutes. The standard proportions for the manufacture of a unit of Zizbo are 2 units of A and 3 units of B. The unit standard prices of A and B are $10 and $8, respectively. During the month of August, the company used 450 units of A and 750 units of B to produce 230 units of Zizbo.
-What were the direct materials quantity variances for raw materials A and B,respectively?
A) $100 favourable and $480 unfavourable.
B) $200 unfavourable and $240 unfavourable.
C) $300 favourable and $240 unfavourable.
D) $480 unfavourable and $100 favourable.

Question

Quizplus · Accepted Answer

For material A: Standard quantity for 230 units of Zizbo = 2 units of A * 230 = 460 units. Actual quantity used = 450 units. Variance = (460 - 450) * $10 = $100 favourable. For material B: Standard quantity for 230 units of Zizbo = 3 units of B * 230 = 690 units. Actual quantity used = 750 units. Variance = (690 - 750) * $8 = $480 unfavourable.

) Saskatoon Company Uses Two Raw Materials, a and B