In June,Indigo Manufacturing purchased 6,000 gallons of blue dye used to produce stone-washed denim clothing.The price per gallon was $1.24 and the company used 5,400 gallons of the dye during the month to produce 42,660 yards of denim fabric.The standard allows for 8 yards of fabric per gallon of dye.The standard price for the dye is $1.26.What is the materials quantity variance for Indigo for June?

Question

Quizplus · Accepted Answer

Materials quantity variance = (Standard quantity - Actual quantity) x Standard price= (5,400 gallons x 8 yards/gallon) - 42,660 yards x $1.26/gallon= 43,200 yards - 42,660 yards x $1.26/gallon= 540 yards x $1.26/gallon= $85.05 unfavorable

In June,Indigo Manufacturing Purchased 6,000 Gallons of Blue Dye Used