Question

The following data relate to product no. 89 of Mansion Corporation: Direct material standard: 4 square feet at $2.80 per square foot Direct material purchased: 34,000 square feet at $3.20 per square foot Direct material consumed: 32,900 square feet Manufacturing activity: 8,100 units completed Assume that the company computes variances at the earliest point in time. The direct-material quantity variance is:

Answer 1

Answer:

Direct material quantity variance= $1,400 unfavorable

Explanation:

Giving the following information:

Direct material standard: 4 square feet at $2.80 per square foot

Direct material purchased: 34,000 square feet at $3.20 per square foot

Direct material consumed: 32,900 square feet

Manufacturing activity: 8,100 units completed

We need to use the following formula:

Direct material quantity variance= (standard quantity - actual quantity)*standard price

Standard quantity= 8,100 units*4= 32,400 feet

Actual quantity= 32,900

Direct material quantity variance= (32,400 - 32,900)*2.8= 1,400 unfavorable