Question

The actual cost of direct materials is​ $13.00 per pound. The standard cost per pound is​ $8.75. During the current​ period, 9,900 pounds of direct materials were used in production and​ 18,500 pounds were purchased. The standard quantity of direct materials for actual units produced is​ 16,200 pounds. How much is the direct materials quantity​ variance? A. ​$55,125 favorable B. ​$81,900 favorable C. ​$81,900 unfavorable D. ​$55,125 unfavorable

Answer 1

Answer:

A. ​$55,125 favorable

Explanation:

The direct materials quantity​ variance is given by the difference between actual quantity used in production and the standard quantity valued at the standard cost.

Actual quantity used in production = 9,900 pounds

Standard quantity for actual units produced =​ 16,200 pounds

Standard cost per pound =$8.75.

The direct materials quantity​ variance is:

$DMQV = (16,200 - 9,900)*\ 8.75\\DMQV=\ 55,125$

Since the company used a lesser quantity than the expected (standard) quantity, the balance is favorable.

Therefore, the answer is A. ​$55,125 favorable.