Solly Corporation produces a product for national distribution. Standards for the product are:Materials: 12 ounces per unit at 60¢ per ounce.Labor: 2 hours per unit at $8 per hour.During the month of December, the company produced 1,000 units. Information for the month follows:Materials: 14,000 ounces purchased and used at a total cost of $7,700.Labor: 2,500 hours worked at a total cost of $20,625.The materials quantity variance is:
A) $1,200 Unfavorable
B) $1,100 Unfavorable
C) $1,100 Favorable
D) $1,200 Favorable

Question

Quizplus · Accepted Answer

The standard quantity of materials for 1,000 units is 12,000 ounces (12 oz per unit x 1,000 units). The actual quantity of materials used is 14,000 ounces, which is 2,000 ounces over the standard quantity.

Materials Quantity Variance = (Actual Quantity - Standard Quantity) x Standard Price
= (14,000 - 12,000) x $0.60
= $1,200 Unfavorable

Solly Corporation Produces a Product for National Distribution