Happy, Inc. produces a product requiring 8 pounds of material at P1.50 per pound. Happy, Inc. produced 10,000 units of this product during 2021 resulting in a P30,000 unfavorable materials quantity variance. How many pounds of direct material did Happy, Inc use during 2021? A. 100,000 pounds B. 160,000 pounds C. 80,000 pounds D. 125,000 pounds
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.
Happy, Inc. produces a product requiring 8 pounds of material at P1.50 per pound. Happy, Inc. produced 10,000 units of this product during 2021 resulting in a P30,000 unfavorable materials quantity variance. How many pounds of direct material did Happy, Inc use during 2021?
A. 100,000 pounds
B. 160,000 pounds
C. 80,000 pounds
D. 125,000 pounds
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