The per-unit standards for direct materials are 2 gallons at $4 per gallon. Last month, 2,800 gallons of direct materials that actually cost $10,600 were used to produce 1,500 units of product. The direct materials quantity variance for last month was
A) $800 favorable.
B) $600 favorable.
C) $800 unfavorable.
D) $1,400 unfavorable.

Question

Quizplus · Accepted Answer

The direct materials 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, multiplied by the standard price per unit. In this case, the actual quantity of materials used was 2,800 gallons, the standard quantity of materials allowed for the actual output was 1,500 units * 2 gallons per unit = 3,000 gallons, and the standard price per unit is $4 per gallon. Therefore, the direct materials quantity variance is (2,800 gallons - 3,000 gallons) * $4 per gallon = $800 unfavorable.

The Per-Unit Standards for Direct Materials Are 2 Gallons at $4