The Lucy Corporation purchased and used 129,000 board feet of lumber in production, at a total cost of $1,548,000. Original production had been budgeted for 22,000 units with a standard material quantity of 5.7 board feet per unit and a standard price of $12 per board foot. Actual production was 23,500 units.
The materials quantity variance is

Question

Quizplus · Accepted Answer

First, calculate the standard quantity of lumber that should have been used for the actual production with the given data: 
Standard quantity = Standard material quantity per unit x Actual production 
Standard quantity = 5.7 board feet/unit x 23,500 units 
Standard quantity = 134,950 board feet

Then, calculate the total cost of the actual amount of lumber used: 
Actual cost = Actual quantity x Actual price 
Actual cost = 129,000 board feet x $12/board foot 
Actual cost = $1,548,000

Now we can calculate the materials quantity variance: 
Materials quantity variance = Standard quantity - Actual quantity 
Materials quantity variance = 134,950 board feet - 129,000 board feet 
Materials quantity variance = 5,950 board feet

Since the actual quantity used is less than the standard quantity, the variance is favorable. 
To convert the board feet into dollars, we can multiply the materials quantity variance by the standard price: 
Materials quantity variance in dollars = Materials quantity variance x Standard price 
Materials quantity variance in dollars = 5,950 board feet x $12/board foot 
Materials quantity variance in dollars = $71,400

Therefore, the materials quantity variance is $59,400 favorable (C).

The Lucy Corporation Purchased and Used 129,000 Board Feet of Lumber