Question

The per-unit standards for direct materials are 2 pounds at $5 per pound. Last month, 11,200 pounds of direct materials that actually cost $53,000 were used to produce 6,000 units of product. The direct materials quantity variance for last month was

Answer 1

$4,000 favorable

Step-by-step explanation:

The computation of the material quantity variance is shown below:

= Standard Price × (Standard Quantity - Actual Quantity)

= $5 × (2 pounds × 6,000 units - 11,200 pounds)

= $5 × (12,000 pounds - 11,200 pounds)

= $5 × 800

= $4,000 favorable

Simply we deduct the actual quantity from the standard quantity and the difference is multiplied with the standard price so that the correct variance can be computed