Question

Assume that the standard cost to make one unit of product includes 15 units of raw materials at a price of $3 per unit. In July, 34,000 units of raw materials were purchased for $100,800, and 30,600 units of raw materials were used to produce 2,000 units of finished product. What is the materials quantity variance

Answer 1

Direct material quantity variance= $1,800 unfavorable

Step-by-step explanation:

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

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

Standard quantity= 2,000*15= 30,000

Actual quantity= 30,600

Direct material quantity variance= (30,000 - 30,600)*3

Direct material quantity variance= $1,800 unfavorable