Question

During the latest month, the company purchased and used 47,000 pounds of direct materials at a price of $1.20 per pound to produce 10,000 units of output. direct labor costs for the month totaled $28,425 based on 3,790 direct labor hours worked. variable manufacturing overhead costs incurred totaled $11,800 and fixed manufacturing overhead incurred was $10,000. based on this information, the direct materials quantity variance for the month was:

Answer 1

Answer:

$11,700 favorable variance

Explanation:

direct materials quantity variance = SP x (AQ – SQ)

• SP = standard price = $0.90 per pound
• SQ = standard quantity = 6 pounds per unit x 10,000 = 60,000 pounds
• AQ = actual quantity = 47,000 pounds (= 4.7 pounds per unit)

direct materials quantity variance = $0.90 per pound x (47,000 pounds – 60,000 pounds) = $0.9 per pound x -13,000 pounds = -$11,700 favorable variance

When the answer is negative, the variance is favorable.