Bryan Company employs a standard cost system in which direct materials inventory is carried at standard cost. Bryan has established the following standards for the prime costs of one unit of product:
$\begin{array} { | l | r | r | r | }
\hline & \text { Standard Quantity } & \text { Standard Price } & \text { Standard Cost } \
\hline \text { Direct Materials } & 6 \text { kilograms } & \$ 3.50 / \text { kilogram } & \$ 21.00 \
\hline \text { Direct Labour } & 1.3 \text { hours } & \$ 11.00 / \text { hour } & \$ 14.30 \
\hline & & & \$ 35.30 \
\hline
\end{array}$During March, Bryan purchased 165,000 kilograms of direct materials at a total cost of $585,750. The total factory wages for March were $400,000, 90 percent of which were for direct labour. Bryan manufactured 25,000 units of product during March, using 151,000 kilograms of direct materials and 32,000 direct labour hours.

-What was the direct materials quantity variance for March?
A) $3,500 favourable.
B) $3,500 unfavourable.
C) $52,500 favourable.
D) $52,500 unfavourable.

Question

Bryan Company employs a standard cost system in which direct materials inventory is carried at standard cost. Bryan has established the following standards for the prime costs of one unit of product:
$\begin{array} { | l | r | r | r | } 
\hline & \text { Standard Quantity } & \text { Standard Price } & \text { Standard Cost } \
\hline \text { Direct Materials } & 6 \text { kilograms } & \$ 3.50 / \text { kilogram } & \$ 21.00 \
\hline \text { Direct Labour } & 1.3 \text { hours } & \$ 11.00 / \text { hour } & \$ 14.30 \
\hline & & & \$ 35.30 \
\hline
\end{array}$During March, Bryan purchased 165,000 kilograms of direct materials at a total cost of $585,750. The total factory wages for March were $400,000, 90 percent of which were for direct labour. Bryan manufactured 25,000 units of product during March, using 151,000 kilograms of direct materials and 32,000 direct labour hours.

-What was the direct materials quantity variance for March?
A) $3,500 favourable.
B) $3,500 unfavourable.
C) $52,500 favourable.
D) $52,500 unfavourable.

Quizplus · Accepted Answer

The direct materials quantity variance is calculated as (Actual Quantity - Standard Quantity) x Standard Price. For March, the standard quantity for 25,000 units is 25,000 units x 6 kilograms/unit = 150,000 kilograms. The actual quantity used was 151,000 kilograms. Therefore, the variance is (151,000 kilograms - 150,000 kilograms) x $3.50/kg = 1,000 kilograms x $3.50/kg = $3,500 unfavourable, because more materials were used than the standard allows.

Bryan Company Employs a Standard Cost System in Which Direct