Melrose Corporation makes a product that uses a material with the following standards: The company budgeted for production of 5, 800 units in September, but actual production was 5, 900 units.The company used 50, 210 pounds of direct material to produce this output.The company purchased 55, 100 pounds of the direct material at $5.80 per pound. The direct materials purchases variance is computed when the materials are purchased.
The materials quantity variance for September is:

Question

Melrose Corporation makes a product that uses a material with the following standards:  The company budgeted for production of 5, 800 units in September, but actual production was 5, 900 units.The company used 50, 210 pounds of direct material to produce this output.The company purchased 55, 100 pounds of the direct material at $5.80 per pound. The direct materials purchases variance is computed when the materials are purchased.
The materials quantity variance for September is:

Quizplus · Accepted Answer

SQ = 5, 900 units × 8.4 pounds per unit = 49, 560 pounds
Materials quantity variance = (AQ - SQ)× SP
= (50, 210 pounds - 49, 560 pounds)× $6.00 per pound
= (650 pounds)× $6.00 per pound
= $3, 900 U

Melrose Corporation Makes a Product That Uses a Material with the Following