The Following information is identical to all four Polka Dot Company questions:

The Polka dot company uses standard costing and has established the following standards for its single product:

Direct Materials 2 litres at $3 per litre
Direct Labor 0.5 hours at $8 per hour
Variable Manufacturing Overhead 0.5 hours at $2 per hour

During November, the company made 4,000 units and incurred the following costs:

Direct Materials Purchased 8,100 litres at $3.10 per litre
Direct Materials Used 7,600 litres
Direct Labor Used 2,200 hours at $8.25 per hour
Actual Variable Manufacturing Overhead $4,175

The company applies variable manufacturing overhead to products on the basis of direct labour hours.

Required: What was the materials quantity variance for November?

Question

The Following information is identical to all four Polka Dot Company questions:

The Polka dot company uses standard costing and has established the following standards for its single product:

Direct Materials	2 litres at $3 per litre
Direct Labor	0.5 hours at $8 per hour
Variable Manufacturing Overhead	0.5 hours at $2 per hour

During November, the company made 4,000 units and incurred the following costs:

Direct Materials Purchased	8,100 litres at $3.10 per litre
Direct Materials Used	7,600 litres
Direct Labor Used	2,200 hours at $8.25 per hour
Actual Variable Manufacturing Overhead	$4,175

The company applies variable manufacturing overhead to products on the basis of direct labour hours.

Required: What was the materials quantity variance for November?

BlackTom AI · Accepted Answer

Materials quantity (usage) variance = (Actual quantity used − Standard quantity allowed) × Standard price.

Relevant concepts:
- Standard quantity allowed = standard usage per unit × actual units produced.
- Use actual materials used (not purchased) for the quantity/usage variance.
- A negative result (AQ < SQ) is favourable because less material was used than standard; positive is unfavourable.

Step-by-step calculation:
1. Standard quantity allowed: 2 litres/unit × 4,000 units = 8,000 litres.
2. Actual quantity used: 7,600 litres (given).
3. Standard price per litre: $3.00.
4. Quantity variance = (AQ − SQ) × SP = (7,600 − 8,000) × $3.00
   = (−400) × $3.00
   = −$1,200.

Interpretation: The negative sign means a $1,200 favourable materials quantity variance — the company used 400 fewer litres than the standard for the output achieved, saving $1,200 compared with the standard allowance.

Why this is correct:
- We used actual usage (7,600 litres), applied the standard allowed (8,000 litres), and multiplied by the standard price ($3). That is the textbook formula for materials quantity variance.

Why the other options are incorrect:
- $300 unfavourable: would result if someone used purchased quantity (8,100 litres) instead of actual used: (8,100 − 8,000) × $3 = $300 unfavourable — incorrect because quantity variance uses materials used, not purchased.
- $1,200 unfavourable: wrong sign; same magnitude but wrong interpretation. Actual use was less than standard, so it is favourable, not unfavourable.
- $1,500 favourable: would correspond to a 500-litre favorable difference ((500)×$3), not supported by data (actual used is 400 litres less).
- $300 favourable: no consistent calculation with given numbers (would be (8,000−7,900)×$3), not applicable.

Conclusion: The materials quantity variance for November is $1,200 favourable, which matches the provided answer.

类似问题

The materials quantity variance is calculated based on the actual quantity of materials used compared to the budgeted quantity for the job. If the actual quantity used is less than the quantity budgeted for the job, the quantity variance is favorable.

You own a bond that pays $64 in interest annually. The face value is $1,000 and the current market price is $1,021.61. The bond matures in 11 years. What is the yield to maturity?

Which of the following statements is CORRECT?

It will cost $9,600 to acquire an ice cream cart that is expected to produce cash inflows of $3,600 a year for three years. After the three years, the cart is expected to be worthless. What is the payback period?

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