The following information is available for Maher Manufacturing Company.
-- Direct materials price standard is $3.25 per pound.
-- Direct materials quantity standard is six pounds per finished unit.
-- Budgeted production is 25,000 finished units.
-- 175,000 pounds of direct materials were purchased for $525,000.
-- 175,000 pounds of direct materials were used in production.
-- 25,600 finished units of product were produced.
What is the direct materials quantity variance?
A) $21,400 Unfavorable
B) $21,400 Favorable
C) $69,550 Unfavorable
D) $69,550 Favorable

Question

Quizplus · Accepted Answer

Direct Materials Quantity Variance = (Actual Quantity Used - Budgeted Quantity Allowed) x Standard Price

The budgeted quantity allowed for 25,600 finished units would be:

25,600 finished units × 6 pounds per unit = 153,600 pounds

Direct Materials Quantity Variance = (175,000 pounds - 153,600 pounds) x $3.25 per pound

Direct Materials Quantity Variance = $69,550 unfavorable.

The Following Information Is Available for Maher Manufacturing Company