The following materials standards have been established for a particular product: Standard quantity per unit of output 2.6 meters Standard price $10.55 per meter The following data pertain to operations concerning the product for the last month: Actual materials purchased 6,000 meters Actual cost of materials purchased $59,400 Actual materials used in production 5,600 meters Actual output 2,200 units Question: What is the materials quantity variance for the month? (label whether favorable or unfavorable; no dollar sign and comma)
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
The following materials standards have been established for a particular product:
Standard quantity per unit of output 2.6 meters
Standard price $10.55 per meter
The following data pertain to operations concerning the product for the last month:
Actual materials purchased 6,000 meters
Actual cost of materials purchased $59,400
Actual materials used in production 5,600 meters
Actual output 2,200 units
Question: What is the materials quantity variance for the month? (label whether favorable or unfavorable; no dollar sign and comma)
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