Perez, Inc. recently completed 58,000 units of a product that was expected to consume 4 pounds of direct material per finished unit. The standard price of the direct material was $7.50 per pound. If the firm purchased and consumed 236,000 pounds in manufacturing (cost = $1,721,500), the direct-material quantity variance would be figured as:

Question

Business

Adrian Butler

19 November, 09:16

Perez, Inc. recently completed 58,000 units of a product that was expected to consume 4 pounds of direct material per finished unit. The standard price of the direct material was $7.50 per pound. If the firm purchased and consumed 236,000 pounds in manufacturing (cost = $1,721,500), the direct-material quantity variance would be figured as:

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Diego Meadows · Answer 1

Answer is direct-material quantity $30.000 (Unfavorable).

Explanation:

To calculate the Direct Material Quantity Variance = Standard Rate * (Actual Quantity - Standard Quantity Used for Actual Production)

= 7.50 * (236.000 - 58.000*4) = $30.000 (Unfavorable)

Answer is $30.000 (Unfavorable).