Question

The Counting Crows Company uses standard costing. During 2018, 12,000 pounds of direct material were purchased at an average cost of $5.20 per pound. Also during 2018, 10,500 pounds of direct material were used to produce 5,000 units. For 2018, the standards for direct materials were 2 pounds per unit at $5.50 per pound. Compute the direct materials quantity variance for 2018. A. $3,600 unfavorable B. $2,750 unfavorable C. $3,600 favorable D. $3,150 favorable E. No choices are correct

Answer 1

Answer:

Direct material quantity variance= $2,750 unfavorable

Explanation:

Giving the following information:

Also during 2018, 10,500 pounds of direct material was used to produce 5,000 units. For 2018, the standards for direct materials were 2 pounds per unit at $5.50 per pound.

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= (2*5,000 - 10,500)*5.5

Direct material quantity variance= $2,750 unfavorable