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Magno Cereal Corporation uses a standard cost system to collect costs related to the production of its "crunchy pickle" cereal. The pickle (materials) standards for each batch of cereal produced are 1.4 pounds of pickles at a standard cost of $3.00 per pound. During the month of August, Magno purchased 78,000 pounds of pounds at a total cost of $253,500. Magno used all of these pickles to produce 60,000 batches of cereal. What is Magno's materials quantity variance for the month of August? (Points : 2) $1,500 unfavorable $18,000 favorable $19,500 unfavorable $54,000 unfavorable

Respuesta :

Answer:

Option (B) is correct.

Explanation:

Standard quantity:

Standard quantity of pounds required for 1 batch = 1.4 pounds

During the month, no. of batches produced = 60,000

Standard quantity required for 60,000 batches = 60,000 × 1.4

                                                                               = 84,000 pounds

Actual quantity used = 78,000

Standard price per pound = $3 per pound

Material quantity variance:

= (Standard quantity - Actual quantity) × Standard price

= (84,000 - 78,000) × $3 per pound

= 6,000 × $3

= $18,000 Favorable

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