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James Inc.'s flexible budget for June,based upon actual output,called for the use of 10,500 pounds of materials at a standard cost of $7.40 per pound.The Production Department actually used 10,700 pounds of materials costing $7.10 per pound during June.
-The materials quantity variance for James's June operations is:
A)$3,150 favorable.
B)$3,210 unfavorable.
C)$1,480 unfavorable.
D)$3,210 favorable.

Question

Quizplus · Accepted Answer

The materials quantity variance is calculated as (Actual Quantity - Standard Quantity) x Standard Price. Here, it's (10,700 pounds - 10,500 pounds) x $7.40 = 200 pounds x $7.40 = $1,480 unfavorable. This is because more materials were used than planned, increasing costs.

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