Question

Relevant information for Material A is as follows:

Actual quantity purchased and used: 6,500 lbs.
Standard quantity allowed: 6,000 lbs.
Actual price: $3.80
Standard price: $4.00
What was the direct material quantity variance for Material A?

Answer 1

Direct Material Quantity Variance = $2,000 Unfavorable

Step-by-step explanation:

For the provided information we have,

Actual quantity used = 6,500 lbs

Standard quantity allowed for actual production = 6,000 lbs

Actual price = $3.80

Standard price = $4.00

Direct Material Quantity Variance = (Standard Quantity - Actual Quantity)
`*` Standard Price

= (6,000 lbs - 6,500 lbs)
`*` $4.00

= - $2,000

As we can see that actual quantity used is more than the allowed standard quantity, thus, the variance is unfavorable.

Direct Material Quantity Variance = $2,000 Unfavorable