Ben's Climbing Gear, Inc. has direct material costs as follows: What was Ben's standard quantity of material allowed?

Question

Ben's Climbing Gear, Inc. has direct material costs as follows:  What was Ben's standard quantity of material allowed?

Quizplus · Accepted Answer

Materials quantity variance = (actual quantity of materials used - standard quantity of materials allowed) x standard unit price of material
$5,000 F = ($20,000 - standard quantity of materials allowed) x $2.50
$2,000 F* = $20,000 - standard quantity of materials allowed
$22,000** = standard quantity of materials allowed
* 5,000 F/ 2.50
** 20,000 + 2,000 (note that the favorable variance is added to the actual quantity to arrive at the standard quantity because by definition, a favorable variance occurs when standard quantities exceed actual quantities.)