Question

The following data relate to direct materials costs for November: Actual costs 4,700 pounds at $5.40 Standard costs 4,500 pounds at $6.00 What is the direct materials quantity variance

Answer 1

Answer:

$2,820 favorable

Explanation:

Calculation to determine direct materials quantity variance

Using this formula

Direct materials price variance = (Actual materials cost per lb. - Standard materials cost per lb.) * Actual quantity lb

Let plug in the formula

Direct materials price variance = ($5.40 - $6.00) * 4,700 lbs.

Direct materials price variance = (-$0.60) * 4,700 lbs.

Direct materials price variance = $2,820 favorable

Therefore the direct materials price variance is $2,820 favorable.