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A company developed the following per-unit standards for its product: 5 kilograms of direct materials at $3 per kilogram.Last month, 1,000 kilograms of direct materials were purchased for $2,900.Also last month, 700 kilograms of direct materials were used to produce 135 units.
-What was the direct materials quantity variance for last month?
A)$75 unfavourable
B)$75 favourable
C)$900 unfavourable
D)$900 favourable

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Quizplus · Accepted Answer

The direct materials quantity variance is calculated as follows:Standard quantity of direct materials = 5 kilograms per unit x 135 units = 675 kilogramsActual quantity of direct materials used = 700 kilogramsDirect materials quantity variance = (Actual quantity - Standard quantity) x Standard price= (700 kilograms - 675 kilograms) x $3 per kilogram= $75 unfavourable

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