Stench Foods Corporation uses a standard cost system to collect costs related to the production of its garlic flavored yogurt. The garlic (materials) standards for each container of yogurt produced are 0.8 ounces of crushed garlic at a standard cost of $2.30 per ounce. During the month of June, Stench purchased 75,000 ounces of crushed garlic at a total cost of $171,000. Stench used 64,000 of these ounces to produce 71,500 containers of yogurt.
The direct materials purchases variance is computed when the materials are purchased.
What is Stench's materials quantity variance for June?
A)$1,500 Favorable
B)$15,640 Unfavorable
C)$17,250 Favorable
D)$23,800 Favorable

Question

Quizplus · Accepted Answer

Materials quantity variance = (actual quantity used - standard quantity allowed) x standard price

Standard quantity allowed = (number of containers produced) x (standard amount of garlic per container) = 71,500 x 0.8 = 57,200 ounces

Actual quantity used = 64,000 ounces

Materials quantity variance = (64,000 - 57,200) x $2.30 = $15,640 unfavorable.

Stench Foods Corporation Uses a Standard Cost System to Collect