The standard costs and actual costs for direct materials for the manufacture of 2,500 actual units of product are as follows:Standard CostsDirect materials2,500 kilograms @ $8.50Actual CostsDirect materials2,600 kilograms @ $8.75The direct materials quantity variance is
A) $875 favorable variance
B) $850 unfavorable variance
C) $850 favorable variance
D) $875 unfavorable variance

Question

The standard costs and actual costs for direct materials for the manufacture of 2,500 actual units of product are as follows:Standard CostsDirect materials2,500 kilograms @ $8.50Actual CostsDirect materials2,600 kilograms @ $8.75​The direct materials quantity variance is
A) $875 favorable variance
B) $850 unfavorable variance
C) $850 favorable variance
D) $875 unfavorable variance

Quizplus · Accepted Answer

The direct materials quantity variance is calculated as (Standard Quantity - Actual Quantity) x Standard Price. Here, (2,500 kg - 2,600 kg) x $8.50 = -100 kg x $8.50 = $850 unfavorable.

The Standard Costs and Actual Costs for Direct Materials for the Manufacture