Atkins Inc. produces a product requiring 8 pounds of material at $1.50 per pound. Atkins produced 10000 units of this product during 2016 resulting in a $30000 unfavorable materials quantity variance. How many pounds of direct material did Atkins use during 2016?

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Quizplus · Accepted Answer

The unfavorable materials quantity variance is calculated as the difference between the actual quantity of materials used and the standard quantity of materials allowed for the actual output. In this case, the unfavorable variance is $30,000, which means that Atkins used more materials than allowed. The standard quantity of materials allowed is 8 pounds per unit, and Atkins produced 10,000 units, so the standard quantity of materials allowed is 80,000 pounds. The actual quantity of materials used is the standard quantity plus the unfavorable variance, which is 80,000 + 30,000 = 110,000 pounds.