Question

Buckler Company manufactures desks with vinyl tops. In 2004, a 1,000 desk production run cost for the vinyl used per Model S desk is $27.00 based on 12 square feet of vinyl at a cost of $2.25 per square foot. A production run of 1,000 desks in 2003 resulted in the usage of 12,600 square feet of vinyl at a cost of $2.00 per square foot, a total cost of $25,200.

What is the material volume variance resulting from the above production run?

Answer 1

Standard quantity of material for actual production = Standard quantity per unit x Actual output

                                                                         = 12 sq. feet x 1,000 = 12,000 sq. feet    

Material volume variance = Standard price x (Actual quantity – Standard quantity)

                                     = $ 2.25 x (12,600 – 12,000)

                                      = $ 2.25 x 600 = $ 1,350

Material volume variance for the production run is $ 1,350 Unfavorable.