Aqua Company
Aqua Company produces aquariums. During the year, 150,000 aquariums were produced. Materials and labour standards for producing the aquariums are as follows: $\begin{array}{ll}
\text { Direct materials (2 sheets of glass }(\$) \$ 2 \text { per sheet) } & \$ 4 \
\text { Direct labour (3 hours }(\$ 8 \text { per hour) } & 24
\end{array}$ The company purchased and used 310,000 sheets of glass at $1.50 per sheet, and its actual labour hours were 435,000 hours at a wage rate of $8.50 per hour.
-Refer to Aqua Company. What is the materials usage variance?

Question

Quizplus · Accepted Answer

The materials usage variance is calculated as (Actual Quantity - Standard Quantity) x Standard Price. The standard quantity for 150,000 aquariums is 300,000 sheets (150,000 x 2). The actual quantity used is 310,000 sheets. The standard price is $2 per sheet. Thus, the variance is (310,000 - 300,000) x $2 = $20,000 Unfavorable.

Aqua Company Aqua Company Produces Aquariums The Company Purchased and Used 310,000 Sheets of Glass at Aquariums

Aqua Company
Aqua Company Produces Aquariums The Company Purchased and Used 310,000 Sheets of Glass at Aquariums