Standard Gears produces lawn mower gears. It uses units as the cost driver for overhead. The following information was provided concerning its standard cost system:
$\begin{array}{ll}\text { Actual Data }&\text { Budgeted and Standard Data }\
\begin{array}{|l|c|}
\hline \text { Produced } & 12,400 \text { units } \
\hline \text { Materials purchased } & 4,650 \text { lbs. for a total cost of } \$ 32,550 \
\hline \text { Materials used } & 4,700 \text { lbs. } \
\hline \text { Labor worked } & 7,460 \mathrm{hrs} \text {. costing } \$ 79,822 \\hline \text { Actual overhead } & \text { Fixed: } \$ 84,800 \
&\text { Variable } \$ 36,100\
\hline
\end{array}&\begin{array}{|l|c|}
\hline \text { Budgeted units } & 12,500 \text { units } \
\hline \text { Budgeted materials } & 0.401 \mathrm{1b} @ \$ 7.10 \text { per } 1 \mathrm{~b} . \
\hline \text { Budgeted labor } & 36 \text { minutes @ } \$ 11.00 \text { per hour } \
\hline \text { Budgeted variable overhead } & \$ 35,625 \
\hline \text { Budgeted fixed overhead } & \$ 85,500\\\hline
\end{array}
\end{array}$
What is the direct material quantity variance?

Question

Standard Gears produces lawn mower gears. It uses units as the cost driver for overhead. The following information was provided concerning its standard cost system:
$\begin{array}{ll}\text { Actual Data }&\text { Budgeted and Standard Data }\
\begin{array}{|l|c|}
\hline \text { Produced } & 12,400 \text { units } \
\hline \text { Materials purchased } & 4,650 \text { lbs. for a total cost of } \$ 32,550 \
\hline \text { Materials used } & 4,700 \text { lbs. } \
\hline \text { Labor worked } & 7,460 \mathrm{hrs} \text {. costing } \$ 79,822 \\hline \text { Actual overhead } & \text { Fixed: } \$ 84,800 \
&\text { Variable } \$ 36,100\
\hline
\end{array}&\begin{array}{|l|c|}
\hline \text { Budgeted units } & 12,500 \text { units } \
\hline \text { Budgeted materials } & 0.401 \mathrm{1b} @ \$ 7.10 \text { per } 1 \mathrm{~b} . \
\hline \text { Budgeted labor } & 36 \text { minutes @ } \$ 11.00 \text { per hour } \
\hline \text { Budgeted variable overhead } & \$ 35,625 \
\hline \text { Budgeted fixed overhead } & \$ 85,500\\\hline 
\end{array}
\end{array}$
What is the direct material quantity variance?

Quizplus · Accepted Answer

The direct material quantity variance is calculated as the difference between the actual quantity of materials used and the standard quantity of materials allowed for the actual output. The standard quantity of materials allowed for the actual output is calculated as the actual output multiplied by the standard quantity of materials per unit. In this case, the actual output is 12,400 units, the standard quantity of materials per unit is 0.401 lbs, and the actual quantity of materials used is 4,700 lbs. Therefore, the standard quantity of materials allowed for the actual output is 12,400 units * 0.401 lbs/unit = 4,972 lbs. The direct material quantity variance is calculated as 4,700 lbs - 4,972 lbs = -272 lbs. Since the actual quantity of materials used is less than the standard quantity of materials allowed, the variance is favorable. The favorable variance is $272 * $7.10 = $1,846.

Standard Gears Produces Lawn Mower Gears What Is the Direct Material Quantity Variance? A) $465 Favorable

Standard Gears Produces Lawn Mower Gears What Is the Direct Material Quantity Variance?
A) $465 Favorable