The standard amount of materials required to make one unit of Product Q is 4 pounds.Tusa's static budget showed a planned production of 3,800 units.During the period,the company actually produced 4,100 units of product.The actual amount of materials used averaged 3.9 pounds per unit.The standard price of material is $1 per pound.Based on this information,the materials usage variance was:
A) $410 favorable.
B) $380 unfavorable.
C) $410 unfavorable.
D) $380 favorable.

Question

Quizplus · Accepted Answer

The materials usage variance is calculated as (Actual quantity used - Standard quantity allowed) x Standard price. In this case, the actual quantity used is 4,100 units x 3.9 pounds per unit = 15,990 pounds. The standard quantity allowed is 4,100 units x 4 pounds per unit = 16,400 pounds. The standard price is $1 per pound. Therefore, the materials usage variance is (15,990 pounds - 16,400 pounds) x $1 per pound = $410 favorable.

The Standard Amount of Materials Required to Make One Unit