UKQuantity variance

agnes

Hi,
my name is Agnes and I am taking Introduction to Management Accounting at University level. I wonder how they calculated the quantity level in this question?
I have read that quantity variance= (actual quantity less standard quantity)* standard price
Is this a formula I can use in this example, and if yes, how do I find the standard quantity?
Agnes

gazmentsaci

Hello here its :
Material Price Variance = (Standard Rate - Actual Rate) * Actual material Consumption * Actual number of shirts

= (680 - 686) Baht per year * 1.11 yard per shirt * 3,700 shirts

= - 24,600 Baht

Material Quantity Variance = (Standard Quantity - Actual Quantity) * Standard Rate * Actual number of shirts

= (1.00 - 1.11) yard per shirt * 680 baht per yard * 3,700 shirts

= -272,000 Baht

agnes

thanks for explaining. I also wonder why it is -272,000 Baht and not -276,760 Baht? Because when I calculate the last line that's what I get;
(1.00 - 1.11) yard per shirt * 680 baht per yard * 3,700 shirts= -276,760 Baht

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