Parrish Company had the following information available for its specialty product:
Standards for one unit of product:
Direct Materials: 5 pounds at $2 per pound
Direct Labor: 0.50 hour at $16 per hour
Materials and Labor Used to produce 8,500 units:
Direct Materials: ? pounds at $2.10 per pound
Direct Labor: 4,000 hours at $16.80 per hour
If the Direct Materials Quantity Variance is $7,000 Unfavorable,what is the actual quantity of direct materials used?
A) 7,000
B) 42,500
C) 46,000
D) 47,000

Question

Quizplus · Accepted Answer

First, we need to calculate the standard quantity of direct materials used:
5 pounds per unit x 8,500 units = 42,500 pounds

Next, we can use the Direct Materials Quantity Variance formula to solve for the actual quantity of direct materials used:
DMQV = (AQ - SQ) x SP
$7,000 = (AQ - 42,500) x $2
AQ - 42,500 = $3,500
AQ = $3,500 + 42,500
AQ = $46,000

Therefore, the actual quantity of direct materials used is 46,000 pounds.

Parrish Company Had the Following Information Available for Its Specialty