Blaster Inc., manufactures portable radios. Each radio requires 3 units of Part XBEZ52, which has a standard cost of $1.45 per unit. During May, the company purchased 12,000 units of the part for a total of $18,000. Also during May, the company manufactured 3,000 radios, using 10,000 units of part XBEZ52. The direct materials purchases variance is computed when the materials are purchased. During May, the materials quantity variance for part XBEZ52 was:
A)$1,450 U
B)$1,450 F
C)$4,350 F
D)$4,350 U

Question

Quizplus · Accepted Answer

The materials quantity variance is computed as the difference between the actual quantity of materials used and the standard quantity of materials that should have been used, multiplied by the standard price per unit. In this case, the actual quantity of materials used is 10,000 units, and the standard quantity of materials that should have been used is 3,000 radios * 3 units per radio = 9,000 units. The difference between these two quantities is 1,000 units. The standard price per unit is $1.45. Therefore, the materials quantity variance is 1,000 units * $1.45 per unit = $1,450 unfavorable.