Baskets Inc. gathered the following actual results for the current month: Actual amounts: Units produced 5600 Direct materials purchased and used (7800 lbs.) $70,200 Budgeted production and standard costs were: Budgeted production 5300 units Direct materials 2.0 lbs/unit at $3/lb. What is the direct materials quantity variance?

Direct Material Quantity Variance = $10200 Fav

Explanation:

given data

Units produced = 5600

Direct materials purchased and used (7800 lbs.) = $70,200

Budgeted production = 5300 units

Direct materials 2.0 lbs/unit = $3/lb

to find out

direct materials quantity variance

solution

we get here Direct Material Quantity Variance that is express as

Direct Material Quantity Variance = (Standard Quantity - Actual Quantity) * Standard Rate ... 1

so put here value we get

Direct Material Quantity Variance = (5600 * 2.0 - 7800) * 3

Direct Material Quantity Variance = (11200 - 7800) * 3

Direct Material Quantity Variance = $10200 Fav