The Apoundright Company uses standard costing and has established the following standards for its single product:
Direct materials: 2 gallons at $3 per gallon
Direct labor: 0.5 hours at $8 per hour
Variable 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 gallons at $3.10 per gallon
Direct materials used: 7,600 gallons
Direct labor used: 2,200 hours at $8.25 per hour
Actual variable overhead: $4,175
The company applies variable overhead to products on the basis of standard direct labor-hours.
-The materials quantity variance for November was:
A) $1,200 U
B) $1,200 F
C) $300 U
D) $1,500 F

Question

Quizplus · Accepted Answer

The materials quantity variance is calculated as (actual quantity - standard quantity) x standard price. 
Actual quantity = 7,600 gallons
Standard quantity = 4,000 units x 2 gallons per unit = 8,000 gallons
Standard price = $3 per gallon

Therefore, (7,600 - 8,000) x $3 = $1,200 F.

The Apoundright Company Uses Standard Costing and Has Established the Following