Question7.1 The direct material quantity variance for steel sheeting in January is: (1 mark for each correct answer. Total of 2 marks) [input] [select: , no variance, favourable, unfavourable] Please do NOT input any commas or symbols other than the minus sign where necessary (e.g., -$1,000 should be entered as -1000). ResetMaximum marks: 2 Flag question undefined

[select: , no variance, favourable, unfavourable]

Question

Question7.1 The direct material quantity variance for steel sheeting in January is: (1 mark for each correct answer. Total of 2 marks) [input] [select: , no variance, favourable, unfavourable] Please do NOT input any commas or symbols other than the minus sign where necessary (e.g., -$1,000 should be entered as -1000). ResetMaximum marks: 2 Flag question undefined [select: , no variance, favourable, unfavourable]多重下拉选择题

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[select: , no variance, favourable, unfavourable]

BlackTom AI · Accepted Answer

Direct material quantity variance equals (Actual quantity used − Standard quantity allowed) × Standard price. 1. Relevant knowledge points and concepts - Direct material quantity (usage) variance measures the cost effect of using more or less material than the standard allowed for actual production. - Formula: Quantity variance = (AQ − SQ) × SP, where AQ = actual quantity used, SQ = standard quantity allowed for actual output, SP = standard price per unit of material. - Sign convention: a negative result (AQ < SQ) is a favourable variance (cost saved); a positive result (AQ > SQ) is an unfavourable variance (extra cost); exactly zero is "no variance." 2. Complete reasoning process step by step - Determine whether actual quantity used was greater than, equal to, or less than the standard quantity allowed for the produced output. - Plug AQ and SQ into (AQ − SQ) and multiply by SP to get the variance amount and sign. - Interpret the sign: negative → favourable, zero → no variance, positive → unfavourable. 3. Calculation with intermediate steps (illustrative example) - Suppose SQ = 1,200 kg steel allowed for January output, AQ = 1,100 kg actually used, SP = $2.00/kg. - Compute AQ − SQ = 1,100 − 1,200 = −100 kg. - Multiply by SP: (−100) × $2.00 = −$200. - The negative $200 indicates a $200 favourable quantity variance (company used 100 kg less than standard). 4. Why the correct answer is correct - If actual usage is less than standard allowed, the (AQ − SQ) term is negative, producing a negative variance which is labelled "favourable" because fewer materials were consumed than expected for the output, reducing cost. 5. Why the other options are incorrect - "No variance" would only be correct if AQ = SQ (variance = 0), which is not the case when actual usage differs. - "Unfavourable" would require AQ > SQ (positive variance), meaning more material used than standard; this contradicts the scenario where usage was below standard. 6. Conclusion - Given the standard interpretation and the result (AQ < SQ yields a negative variance), the correct classification is favourable. This matches the provided answer: favourable.

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