Question

Gipple Corporation makes a product that uses a material with the quantity standard of 7.3 grams...

Gipple Corporation makes a product that uses a material with the quantity standard of 7.3 grams per unit of output and the price standard of $6.00 per gram. In January the company produced 3,400 units using 24,870 grams of the direct material. During the month the company purchased 27,400 grams of the direct material at $6.10 per gram. The direct materials purchases variance is computed when the materials are purchased.

The materials quantity variance for January is:

Select one:

a. $305 U

b. $305 F

c. $300 U

d. $300 F

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Answer #1

Standard price = $6 per gram

Standard quantity = 7.3 gram per unit

Actual output = 3,400 units

Hence, standard quantity for actual output = 3,400 x 7.3
= 24,820 gram

Actual quantity of material used = 24,870 gram

Direct material quantity variance = Standard price x (Standard quantity - Actual quantity)
= 6 x (24,820 – 24,870)  
= $300 (Unfavorable)
Correct option is (c)

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