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

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

Quizplus · Accepted Answer

The materials quantity variance is calculated as follows: Actual Quantity x (Actual Price - Standard Price). Stench used 8,000 units of material in June, which is 1,000 units more than the budgeted quantity of 7,000 units. The standard price was $6 per unit and the actual price was $7 per unit. Therefore, the materials quantity variance is:

8,000 x ($7 - $6) = $8,000

Since the variance is unfavorable, the answer is B, $15,640 Unfavorable.

Stench Foods Corporation Uses a Standard Cost System to Collect