Question

Exeter has a materials standard of 1 pound per unit of output. Each pound has a standard price of $27 per pound. During July, Exeter paid $141,000 for 4,970 pounds, which it used to produce 4,760 units. What is the direct materials quantity variance?a) $10,320 favorable
b) $27,780 unfavorable
c) $11,220 unfavorable
d) $17,460 unfavorable

Answer 1

Answer:

the direct material quantity variance is $5,670 unfavorable

Explanation:

The computation of the direct material quantity variance is shown below:

= (Standard quantity - actual quantity) × standard price

= (4,760 units × 1 pound per unit - 4,970 pounds) × $27 per pound

= (4,760 pounds  - 4,970 pounds) × $27 per pound

= $5,670 unfavorable

This is the answer but the same is not provided in the given options

Hence, the direct material quantity variance is $5,670 unfavorable

It is unfavorable because the actual pounds is more than the standard one