A company developed the following per unit materials standards for its product: 3 pounds of direct materials at $4 per pound. If 12,000 units of product were produced last month and 37,500 pounds of direct materials were used, the direct materials quantity variance was
A) $3,600 favorable.
B) $6,000 unfavorable.
C) $3,600 unfavorable.
D) $6,000 favorable.

Question

Quizplus · Accepted Answer

The direct materials quantity variance is calculated as (Actual Quantity - Standard Quantity) x Standard Price. The standard quantity for 12,000 units is 36,000 pounds (12,000 units x 3 pounds/unit). The actual quantity used was 37,500 pounds. The variance is (37,500 - 36,000) x $4 = $6,000 unfavorable.

A Company Developed the Following Per Unit Materials Standards for Its