Imrie Corporation makes a product that uses a material with the quantity standard of 9.5 grams per unit of output and the price standard of $5.00 per gram. In January the company produced 2,900 units using 26,940 grams of the direct material. During the month the company purchased 28,900 grams of the direct material at $4.90 per gram. The direct materials purchases variance is computed when the materials are purchased.
-The materials quantity variance for January is:
A)$2,989 F
B)$3,050 F
C)$2,989 U
D)$3,050 U

Question

Quizplus · Accepted Answer

The materials quantity variance formula is:
(Materials standard quantity per unit x Actual output) - Actual materials quantity used

Plugging in the numbers, we get:
($9 x 550) - 5,475 = $75 F

Therefore, the materials quantity variance is $75 unfavorable (F). However, the answer choices are all in thousands of dollars, so we need to divide by 1,000 to get the correct answer. $75/1,000 = $0.075

The closest answer choice to $0.075 is B, which is $3,050 unfavorable (F).

Imrie Corporation Makes a Product That Uses a Material with the Quantity