Johnston Manufacturing Company purchased 14,000 switches to make 6,000 units.The standard allows for 2 switches per unit.The company actually used 14,500 to produce the 6,000 units.Johnston budgeted $0.75 per switch but had to pay $0.80 per switch.What is Johnston's direct materials quantity variance for the period?

Question

Quizplus · Accepted Answer

The direct materials quantity variance is calculated as (Actual Quantity - Standard Quantity) x Standard Price. The standard quantity for 6,000 units is 12,000 switches (6,000 units x 2 switches/unit). The actual quantity used was 14,500 switches. The variance is (14,500 - 12,000) x $0.75 = $1,875 unfavorable.

Johnston Manufacturing Company Purchased 14,000 Switches to Make 6,000 Units