Quantity Variance

Quantity Variance

The difference between sales actually made and the estimated sales, multiplied by the sales price, over a period of time. For example, suppose a company expects to sell 1,000 units at $5 per unit each week. If it sells 1,200 units in week one, its quantity variance is $1,000 ([1,200 - 1,000] * $5). Likewise, if it only sells 700 in week two, the variance is -$1,500 ([700 - 1,000] * $5).
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For example, in Exhibit 3, students set the standards per unit for materials at two pounds at $7 per pound and then stated that 1,800 pounds of materials were used to produce four units such that the Materials Quantity Variance was
The food quantity variance is the responsibility of the production personnel.
Quantity variance represents that part of the total variance resulting from an actual sales volume different from the planned volume.
The quantity variance is determined by multiplying the standard price for the materials times the difference between the quantity expected to be used for the number of products made (200 ounces) and the actual quantity used (250 ounces).
It will be further decomposed into the sales quantity variance, which shows the impact of altered sales levels, and the sales pattern variance, which shows the impact of altered sales patterns over time.
We are not concerned here with whether more or fewer units were sold than the number budgeted, since this is monitored by the sales quantity variance.
Now we can calculate a price and quantity variance for each of Bob's materials.
The authorized report shows a total input variance of $15,300, comprising a favorable quantity variance of $1,200--1 hours x $120--due to 10 fewer water truck hours consumed and an unfavorable input price variance due to the price increase of the sanitation service--$ 16,500 (1,650 hours x $10).