Edgar Inc. has a materials price standard of $2.00 per pound. Six thousand pounds of materials were purchased at $2.20 a pound. The actual quantity of materials used was 6000 pounds although the standard quantity allowed for the output was 5400 pounds. Edgar Inc.'s materials quantity variance is
A) $1200 U.
B) $1200 F.
C) $1320 F.
D) $1320 U.

Question

Quizplus · Accepted Answer

The materials quantity variance is calculated as (Actual Quantity - Standard Quantity) x Standard Price. Here, it is (6000 - 5400) x $2.00 = $1200 Unfavorable.

Edgar Inc Has a Materials Price Standard of $2