An automobile parts company has a standard material price of $2 per pound. In October the company produced 4,500 units using 6,000 pounds of material. The company experienced a favorable materials quantity variance of $1,200. How much is the standard quantity of materials per unit

Standard quantity per unit = 1.466 pounds per units

Explanation:

Material quantity variance occurs when the actual quantity of materials used to achieved a given level of output is more or less than the standard quantity.

It is determined by the difference between the actual and standard quantity of material for the actual level of output multiplied by the the standard price

To determine the standard quantity of materials per unit, we have to work back using the variance given. This is done as follows:

Material quantity variance in pounds = Variance in $ / standard material price per

= $1,200/$2 = 600 pounds favorable

Standard quantity used for actual output = 6000 + 600 = 6,600

Standard quantity per unit = standard quantity for actual output / actual unit produced

Standard quantity per unit = 6,600 pounds / 4,500 units

= 1.466 pounds per units