The Cox Company uses standard costing. The following data is available for April:$\begin{array}{ll}
\text { Actual quantity of direct materials used } & 12,200 \text { gallons } \
\text { Standard price of direct materials } & £ 4 \text { per gallon } \
\text { Material quantity variance } & £ 2,000 \text { unfavourable }
\end{array}$
The standard quantity of material allowed for April production is

A)14,200 gallons.
B)12,700 gallons.
C)11,700 gallons.
D)10,200 gallons.

Question

The Cox Company uses standard costing. The following data is available for April:$\begin{array}{ll}
\text { Actual quantity of direct materials used } & 12,200 \text { gallons } \
\text { Standard price of direct materials } & £ 4 \text { per gallon } \
\text { Material quantity variance } & £ 2,000 \text { unfavourable }
\end{array}$
The standard quantity of material allowed for April production is

A)14,200 gallons.
B)12,700 gallons.
C)11,700 gallons.
D)10,200 gallons.

Quizplus · Accepted Answer

The material quantity variance is calculated as (Actual Quantity - Standard Quantity) x Standard Price. Given an unfavourable variance of £2,000 and a standard price of £4 per gallon, we can set up the equation: (12,200 - Standard Quantity) x £4 = £2,000. Solving for Standard Quantity gives us 11,700 gallons.

The Cox Company Uses Standard Costing The Standard Quantity of Material Allowed for April Production Is