Herrera Co. produces a product requiring 10 pounds of material at $1.50 per pound. Herrera produced 10,000 units of this product during 2009 resulting in a $30,000 unfavorable materials quantity variance. How many pounds of direct material did Herrera use during 2011?

Question

Quizplus · Accepted Answer

The unfavorable materials quantity variance indicates that Herrera used more material than allowed. The variance is calculated as (Actual quantity - Standard quantity) x Standard price. In this case, the variance is $30,000, the standard price is $1.50 per pound, and the standard quantity is 10 pounds per unit. Therefore, the actual quantity used is 10,000 units x 10 pounds per unit + $30,000 / $1.50 per pound = 120,000 pounds.