During August,10,000 units were produced.The standard quantity of material allowed per unit was 10 kilograms at a standard cost of $3 per kilogram.If there was an unfavourable usage variance of $18,750 for August,what would be the actual quantity of materials used?
A)23,438 kilograms
B)31,875 kilograms
C)93,750 kilograms
D)106,250 kilograms

Question

Quizplus · Accepted Answer

The standard quantity of materials allowed is 10,000 units * 10 kg/unit = 100,000 kg. The usage variance is calculated as (Actual Quantity - Standard Quantity) * Standard Cost. Given the variance is $18,750, we have (Actual Quantity - 100,000 kg) * $3 = $18,750. Solving for Actual Quantity gives 106,250 kg.

During August,10,000 Units Were Produced