Rice Corporation has provided the following information:
Direct material standard per unit: 3 pounds
Standard price per pound: $3.50
Actual number of pounds purchased and used: 1,575
Actual cost of materials purchased: $5,355
Actual number of units produced: 500
What is the direct materials quantity variance?
A) $262.50 unfavorable
B) $262.50 favorable
C) $255.00 favorable
D) $255.00 unfavorable

Question

Quizplus · Accepted Answer

The direct materials quantity variance is calculated as (Actual Quantity - Standard Quantity) x Standard Price. The standard quantity for 500 units is 500 units x 3 pounds/unit = 1,500 pounds. The actual quantity used is 1,575 pounds. The variance is (1,575 - 1,500) x $3.50 = $262.50 unfavorable.

Rice Corporation Has Provided the Following Information