Exeter has a materials standard of 1 pound per unit of output.Each pound has a standard price of $26 per pound.During July,Exeter paid $66,100 for 2,475 pounds,which it used to produce 2,350 units.What is the direct materials quantity variance?
A)$1,750 unfavorable
B)$1,300 favorable
C)$3,250 unfavorable
D)$4,550 unfavorable

Question

Quizplus · Accepted Answer

The direct materials quantity variance is calculated as (Actual Quantity - Standard Quantity) x Standard Price. The standard quantity for 2,350 units is 2,350 pounds. The actual quantity used is 2,475 pounds. The variance is (2,475 - 2,350) x $26 = 125 x $26 = $3,250 unfavorable.

Exeter Has a Materials Standard of 1 Pound Per Unit