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8 May, 23:07

A company developed the following per unit materials standards for its product: 3 pounds of direct materials at $5 per pound. If 12,000 units of product were produced last month and 37,500 pounds of direct materials were used, the direct materials quantity variance was

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  1. 9 May, 03:05
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    7,500 Unfavorable

    Explanation:

    Standard rate = $5 per pound

    Actual quantity = 37,500 pounds

    Direct labor quantity variance:

    = Standard rate * (Standard quantity - Actual quantity)

    = 5 * [ (12,000 units * 3 pounds) - 37,500 pounds]

    = 5 * [36,000 pounds - 37,500 pounds]

    = 5 * 1,500

    = 7,500 Unfavorable

    Therefore, the direct materials quantity variance was 7,500 Unfavorable.
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