Answer:
Direct material quantity variance= $1,260 unfavorable
Explanation:
Giving the following information:
Standard quantity of 7.6 liters per unit
Standard price $ 2.10 per liter
The company budgeted for production of 3,400 units.
The actual production was 3,500 units.
The company used 27,200 liters of direct material to produce this output.
To calculate the direct material quantity variance, we need to use the following formula:
Direct material quantity variance= (standard quantity - actual quantity)*standard price
Standard quantity= 3,500 units* 7.6= 26,600
Direct material quantity variance= (26,600 - 27,200)*2.1= $1,260 unfavorable
<u>It is unfavorable because the company used more material than estimated to produce 3,500 units.</u>
