Question

TechSolvers produces 8-foot USB cables. During the past year, the company purchased 500,000 feet of plastic-coated wire at a price of $0.25 per foot. The direct materials standard for the cables allows 8.5 feet of wire at a standard price of $0.23. During the year, the company used a total of 535,000 feet of wire to produce 63,000 8-foot cables. Calculate TechSolvers’ direct materials quantity variance for the year. (Round answer to 0 decimal places, e.g. 125. If variance is zero, select "Not Applicable" and enter 0 for the amounts.)

Answer 1

$8050

Step-by-step explanation:

The direct materials quantity variance is the difference between the standard cost and the actual quantity at standard price. This variance in quantity is as a result of the difference between the actual and expected quantity of materials used. The formula for direct materials quantity variance is given as:

Direct materials quantity variance = Standard Price x (Standard Quantity – Actual Quantity)

Given that: Standard Price = $0.23, Standard Quantity = 535000, Actual Quantity = 500000.

Direct materials quantity variance = $0.23 × (535000 - 500000) = $8050