Perez, Inc.recently completed 56,000 units of a product that was expected to consume four pounds of direct material per ﬁnished unit.The standard price of the direct material was $8.50 per pound.If the ﬁrm purchased and consumed 228,000 pounds in manufacturing (cost = $1,881,000), the direct-material quantity variance would be ﬁgured as:
A)$34,000U.
B)$34,000F.
C)$57,000U.
D)$57,000F.
E)None of the answers is correct.

Question

Quizplus · Accepted Answer

The direct-material quantity variance is calculated as (Actual Quantity - Standard Quantity) x Standard Price. The standard quantity for 56,000 units is 56,000 x 4 = 224,000 pounds. The variance is (228,000 - 224,000) x $8.50 = $34,000U.