Question

Perez, Inc. recently completed 46,000 units of a product that was expected to consume 5 pounds of direct material per finished unit. The standard price of the direct material was $6.50 per pound. If the firm purchased and consumed 234,000 pounds in manufacturing (cost = $1,448,900), the direct-material quantity variance would be:

$26,000U.

$26,000F.

$72,100U.

$72,100F.

None of these.

Answer 1

$26,000U.

Step-by-step explanation:

The direct-material quantity variance = (Actual Quantity * Standard Price) - (Standard Quantity * Standard Price)

= ( Actual Quantity - Standard Quantity) * Standard Price

= [234,000 Pounds - ( 46,000 * 5)] * $ 6.50

= 4,000 Pounds * $ 6.50 Per Pound

= $ 26,000 U

Since the Actual Quantity is greater than the Standard Quantity , the variance is Unfavorable.

Hence the correct answer is The direct-material quantity variance = (Actual Quantity * Standard Price) - (Standard Quantity * Standard Price)

= ( Actual Quantity - Standard Quantity) * Standard Price

= [234,000 Pounds - ( 46,000 * 5)] * $ 6.50

= 4,000 Pounds * $ 6.50 Per Pound

= $ 26,000 U

Since the Actual Quantity is greater than the Standard Quantity , the variance is Unfavorable.

Hence the correct answer is $26,000UThe direct-material quantity variance = (Actual Quantity * Standard Price) - (Standard Quantity * Standard Price)

= ( Actual Quantity - Standard Quantity) * Standard Price

= [234,000 Pounds - ( 46,000 * 5)] * $ 6.50

= 4,000 Pounds * $ 6.50 Per Pound

= $ 26,000 U

Since the Actual Quantity is greater than the Standard Quantity , the variance is Unfavorable.

Hence the correct answer is $26,000U