During June, 90,000 units were produced. The standard quantity of material allowed per unit was 2 pounds at a standard cost of $5 per pound. If there was an unfavorable quantity variance of $5,000 for June, the actual quantity of materials used must have been
A) 179,000 pounds
B) 181,000 pounds
C) 84,000 pounds
D) 1,000 pounds

Question

Quizplus · Accepted Answer

The standard quantity of material allowed for 90,000 units is 90,000 units * 2 pounds/unit = 180,000 pounds. The standard cost is $5 per pound. An unfavorable quantity variance of $5,000 means that the actual cost was $5,000 more than the standard cost for the actual quantity used. Since the variance is calculated based on quantity, and the standard cost per pound is $5, an unfavorable variance of $5,000 means 5,000 / 5 = 1,000 pounds more were used than the standard. Therefore, the actual quantity used was 180,000 pounds + 1,000 pounds = 181,000 pounds.

During June, 90,000 Units Were Produced