Blue Fin Co.produces a product requiring 10 kilograms of material at $1.50 per kilogram.Blue Fin produced 10,000 products during 2020 resulting in a $30,000 unfavourable materials quantity variance.How much direct material did Blue Fin use during 2020?
A)120,000 kilograms
B)100,000 kilograms
C)200,000 kilograms
D)145,000 kilograms

Question

Quizplus · Accepted Answer

The standard quantity for 10,000 products is 100,000 kilograms (10,000 products x 10 kg/product). The $30,000 unfavorable variance indicates that more material was used than the standard. The variance is calculated as (Actual Quantity - Standard Quantity) x Standard Price. Solving for Actual Quantity: ($30,000 / $1.50) + 100,000 = 120,000 kilograms.