Question

Turrubiates Corporation makes a product that uses a material with the following standards: Standard quantity 7.5 liters per unit Standard price $ 2.00 per liter Standard cost $ 15.00 per unit The company budgeted for production of 3,300 units in April, but actual production was 3,400 units. The company used 26,200 liters of direct material to produce this output. The company purchased 19,600 liters of the direct material at $2.1 per liter. The direct materials purchases variance is computed when the materials are purchased. The materials quantity variance for April is:

Answer 1

Answer:

Direct material quantity variance= $1,400 unfavorable

Explanation:

Giving the following information:

Standard quantity 7.5 liters per unit Standard price $ 2.00 per liter

Actual production was 3,400 units.

The company used 26,200 liters of direct material.

To calculate the direct material quantity variance, we need to use the following formula:

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

Direct material quantity variance= (7.5*3,400 - 26,200)*2

Direct material quantity variance= (25,500 - 26,200)*2

Direct material quantity variance= $1,400 unfavorable