Answer:
The correct answer is $322,5 favorable.
It used 50 pounds less than estimated for the number of units produced.
Explanation:
Giving the following information:
Standard price per pound $6.45
Actual quantity used in production 2,750 pounds
Units of product manufactured 700
Materials purchase-price variance–favorable $855
Budget data for the period:
Units to manufacture 1,000
Units of direct materials 4,000 pounds
First, we need to determine the standard quantity required.
Standard quantity= 4,000 pounds/ 1,000 units= 4 pounds per unit
Now, we can calculate the quantity variance:
Direct material quantity variance= (standard quantity - actual quantity)*standard price
Direct material quantity variance= (2,800 - 2,750)*6.45= 322.5 favorable
