Thomas Company uses a standard cost system and recognizes the materials purchase price variance at the time materials are purchased. Information for raw materials for Product RBI for the month of October follows: What is the materials quantity variance?

Question

Thomas Company uses a standard cost system and recognizes the materials purchase price variance at the time materials are purchased. Information for raw materials for Product RBI for the month of October follows:  What is the materials quantity variance?

Quizplus · Accepted Answer

Materials quantity variance = (actual quantity of materials used - standard quantity of materials allowed) x standard unit price of materials
Materials quantity variance = (3,900 - 3,800) x $1.75 = $175 U (because actual amounts exceeded standard)

Thomas Company Uses a Standard Cost System and Recognizes the Materials