The actual cost of direct materials is​ $13.00 per pound. The standard cost per pound is​ $8.75. During the current​ period, 9,900 pounds of

The actual cost of direct materials is​ $13.00 per pound. The standard cost per pound is​ $8.75. During the current​ period, 9,900 pounds of direct materials were used in production and​ 18,500 pounds were purchased. The standard quantity of direct materials for actual units produced is​ 16,200 pounds. How much is the direct materials quantity​ variance? A. ​$55,125 favorable B. ​$81,900 favorable C. ​$81,900 unfavorable D. ​$55,125 unfavorable

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  1. Answer:

    A. ​$55,125 favorable

    Explanation:

    The direct materials quantity​ variance is given by the difference between actual quantity used in production and the standard quantity valued at the standard cost.

    Actual quantity used in production = 9,900 pounds

    Standard quantity for actual units produced =​ 16,200 pounds

    Standard cost per pound =$8.75.

    The direct materials quantity​ variance is:

    [tex]DMQV = (16,200 – 9,900)*\$8.75\\DMQV=\$55,125[/tex]

    Since the company used a lesser quantity than the expected (standard) quantity, the balance is favorable.

    Therefore, the answer is A. ​$55,125 favorable.

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