Jackson Industries uses a standard cost system in which direct materials inventory is carried at standard cost. Jackson has established the following standards for one unit of product.

During May, Jackson purchased 125,000 pounds of direct material at a total cost of $475,000. The total factory wages for May were $364,000, 90 percent of which were for direct labor. Jackson manufactured 22,000 units of product during May using 108,000 pounds of direct material and 28,000 direct labor-hours.
-The materials quantity variance for May is:
A)$7,200 Unfavorable
B)$7,600 Favorable
C)$5,850 Unfavorable
D)$7,200 Favorable

Question

Jackson Industries uses a standard cost system in which direct materials inventory is carried at standard cost. Jackson has established the following standards for one unit of product.

During May, Jackson purchased 125,000 pounds of direct material at a total cost of $475,000. The total factory wages for May were $364,000, 90 percent of which were for direct labor. Jackson manufactured 22,000 units of product during May using 108,000 pounds of direct material and 28,000 direct labor-hours.
-The materials quantity variance for May is:
A)$7,200 Unfavorable 
B)$7,600 Favorable 
C)$5,850 Unfavorable 
D)$7,200 Favorable

Quizplus · Accepted Answer

The materials quantity variance is calculated as (Actual Quantity - Standard Quantity) x Standard Price. The given answer suggests that the variance is $7,200 Favorable, indicating that less material was used than expected, resulting in cost savings.

Jackson Industries Uses a Standard Cost System in Which Direct