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During June, Cisco Company produced 12,000 chainsaw blades. The standard quantity of material allowed per unit was 1.5 pounds of steel per blade at a standard cost of $8 per pound. The actual cost was $7 per pound. The actual pounds of steel that Cisco purchased were 19,500 pounds. All materials purchased were used. Calculate Cisco's materials usage variance.

Sagot :

facundobuzzetti

Answer:

Direct material quantity variance= $12,000 unfavorable

Explanation:

To calculate the direct material quantity variance, we need to use the following formula:

Direct material quantity variance= (standard quantity - actual quantity)*standard price

Direct material quantity variance= (1.5*12,000 - 19,500)*8

Direct material quantity variance= (18,000 - 19,500)*8

Direct material quantity variance= $12,000 unfavorable

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