Asked by Jacob Rosmarin on Jul 21, 2024
Verified
The direct material quantity variance for March is:
A) $3,550 unfavourable.
B) $3,550 favourable.
C) $3,500 favourable.
D) $3,500 unfavourable.
Direct Material Quantity Variance
The difference between the budgeted amount of materials needed for production and the actual amount used, expressed in cost or quantity.
Standard Price
The predetermined cost that a company expects to pay for materials, labor, and other inputs, used as a benchmark for variance analysis.
Actual Grams
The real-world measurement of weight for materials used in a production or laboratory setting, as opposed to theoretical or estimated amounts.
- Appraise the variances in material and labor, emphasizing price, quantity, rate, and efficiency variations.
Verified Answer
JB
JUSTIN BRANCHJul 27, 2024
Final Answer :
D
Explanation :
The direct material quantity variance is calculated as (Actual Quantity - Standard Quantity) x Standard Price. For 25,000 units, the standard quantity of material is 25,000 units x 6.0 grams/unit = 150,000 grams. The actual quantity used was 151,000 grams. Therefore, the variance is (151,000 grams - 150,000 grams) x $3.50/gram = 1,000 grams x $3.50/gram = $3,500 unfavourable, because more material was used than the standard allows.
Learning Objectives
- Appraise the variances in material and labor, emphasizing price, quantity, rate, and efficiency variations.